NAGA and Capex.com announce merger to become multi-asset trading behemoth

Rick Steves

The joint operations will manage 8 global licenses, with an estimated annual trading volume of USD 300 billion in 2023. The merged platforms aim to expand their user base to 5 million by 2025, with a strong focus on the MENA region.

NAGA has announced its merger with Capex.com, a multi-asset trading FinTech platform, in a strategic move that involves a non-cash capital increase and positions the joint entity as a formidable player in the fintech sector.

Octavian Patrascu, the Founder of Capex.com, is set to invest USD 9 million into NAGA through a convertible bond. This investment is part of a broader financial strategy that includes a cash contribution of USD 15 million by Capex and its Founder for the business combination. The merger is expected to yield immediate cost synergies of more than USD 10 million annually.

Merged platforms aim to expand user base to 5 million by 2025

Capex.com has demonstrated impressive growth, with a Compounded Annual Growth Rate (CAGR) of 80% over the past three years. The company boasts a robust user base and significant equity financing, amounting to USD 31 million. In 2023 alone, Capex has seen rapid revenue growth, despite challenging market conditions, estimating USD 40 million in revenue.

The merger will create a combined platform with a user base of 1.5 million worldwide, projected to generate over USD 250 million in revenue over the next three years. The joint group is expected to earn close to USD 90 million in 2023, with an EBITDA of USD 6 million.

Capex, under the leadership of Octavian Patrascu, holds more than five licenses, including the prestigious ADGM license in Abu-Dhabi. Patrascu’s experience, particularly from his time at markets.com, is considered invaluable for the growth and strategic direction of the merged entity.

The joint operations will manage 8 global licenses, with an estimated annual trading volume of USD 300 billion in 2023. The merged platforms aim to expand their user base to 5 million by 2025, with a strong focus on the MENA region.

NAGA’s proprietary technology will be used to leverage Capex’s existing client base, enhancing offerings like social trading, payment services, and crypto trading. This strategic combination is expected to result in significant savings in annual operating expenses and improve client acquisition costs and brand reputation.

Michael Milonas, the CEO of NAGA, emphasized the cultural integration that forms the foundation of this merger. “I am particularly pleased with this development as it unlocks value under the leadership of Octavian and becomes the cornerstone of NAGAs future success, based on three pillars. In terms of cost and revenue synergies, which will lead to a positive EBITA impact immediately. In terms of strategic synergies, the combined entity will have a much bigger footprint regarding users, licenses, and technology, which will lead to scaling the business in the medium term as well as the long term. And lastly, joint leadership is convinced about a strong cultural integration. This is the foundation of a perfect match, and I am excited about what the future holds for NAGA.”

Capex.com’s Octavian Patrascu appointed Group CEO

Octavian Patrascu, the incoming Group CEO, expressed his confidence in the merger, citing the opportunity for accelerated growth and innovation. “I am truly excited about this union as in today’s market, consolidation can help accelerate our roadmap, objectives and give us the dimension needed for true innovation. NAGA and Capex.com have a multitude of synergies and that is why I am confidently investing my own money in this transaction. I believe we can reach our targets and am ready to embrace this new challenge to set a new benchmark in the industry.”

The transaction will also extend the repayment of NAGA’s current USD 5 million loan to the end of 2025 and is supported by NAGA’s largest shareholders. The merger is subject to regulatory approvals and customary closing conditions, with completion expected in Q2 2024. The parties are also committed to pursuing an uplisting to NASDAQ, as previously reported in late 2021.

New financial projections and research coverage for the joint group will be released in time, providing further insights into the implications and future trajectory of this significant merger in the trading industry.

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