GAIN Capital announces $100m sale of GTX ECN business to Deutsche Börse
The transaction, which is set to close in Q2 2018, is expected to result in proceeds of approximately $85 million for GAIN, net of taxes and transaction-related expenses and fees.
Online trading major Gain Capital Holdings Inc (NYSE:GCAP) has announced that it reached a definitive agreement to sell its GTX ECN business, an institutional platform for trading foreign exchange, to Deutsche Börse Group via its FX unit, 360T. The deal’s value is put at $100 million.
GAIN explained the decision with its desire to focus on its core retail business.
“We are very pleased to have built GTX into a successful, high-demand institutional business over the past eight years,” said Glenn Stevens, Chief Executive Officer of GAIN Capital. “We have taken this strategic step in order to focus our attention and resources on our core retail business and on using available levers to unlock shareholder value. Proceeds from the sale of GTX provide us with additional financial flexibility to invest in organic growth and M&A opportunities, while providing increased liquidity to accelerate return on capital, which may include increasing the scale of our stock repurchase program and reducing our debt.”
The transaction, set to close in the second quarter of 2018, is expected to result in proceeds of approximately $85 million for GAIN, net of taxes and transaction-related expenses and fees.
GAIN initially launched GTX in 2010 as a venue for trading in FX and precious metals by institutional investors. Today, the business has over 150 unique clients, including banks, brokers, hedge funds, non-bank market makers, commodities trading advisors, asset managers and retail aggregators, and had over 700 unique users in 2017. For full year 2017, GAIN’s institutional business represented approximately 10% of the Company’s total revenue and 14% of EBITDA.
Vincent Sangiovanni, GTX CEO, said “Looking ahead, Deutsche Börse Group’s FX unit, 360T is an ideal partner for the next phase of GTX’s growth with its broad geographic distribution, complementary product set and deep knowledge of the FX space. We look forward to working closely with 360T to continue to deliver our clients with GTX’s innovative trading platform and high-quality customer service.”
Carlo Kölzer, Head of FX Deutsche Börse Group and 360T CEO said, “We are pleased to announce the acquisition of the GTX ECN business. The highly reputable player in the FX market is a meaningful addition not only to broaden our existing offering but also to complete our holistic value proposition designed to support all clients that operate out of all geographies and client segments based on current or potential future market structure.”
GAIN had a solid first quarter of 2018. Retail average daily volumes increased 31% year-over-year to $12.4 billion in the first quarter of 2018, whereas institutional ECN average daily volume increased 26% year-over-year to a record high of $14.8 billion. The number of new direct accounts rose 24% from the equivalent period in 2017.
