GAIN Capital Holdings, Inc. (GCAP), has sold its institutional business division, GTX ECN, an institutional platform for trading foreign exchange to Deutsche Borse’s 360T for a total consideration of $100 million. The move marks Deutsche Borse’s continued expansion motive in the Fx space and institutional level FX trading businesses to exchanges.
Through this deal, GAIN Capital Holdings is expected to receive $85 million, net of taxes and transaction-related expenses and fees. The deal is expected to close in the second quarter of 2018, subject to regulatory clearances.
The deal comes after a year of Deutsche Borse’s foray into FX ECN of its own. All major exchanges around the globe have been venturing deep into the Fx space including BATS acquisition of Hotspot in 2015 and Euronext acquisition of Fastmatch last May.
GTX launched in 2010 as a trading venue for Fx and precious metals by institutional investors and has come out as a major contributor to group’s revenue. In 2017, GTX has over 150 unique clients including banks, hedge funds, brokers and had over 700 unique users. In 2017, GTX contributed 10 percent of the total group revenue and 14 percent of EBITDA.
Glenn Stevens, CEO of GAIN Capital, commented:
“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 the 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. We are pleased to be able to partner on this transaction with Deutsche Börse Group’s FX unit, 360T, a leading global FX venue,”
GTX CEO, Vincent Sangiovanni said:
“Since our launch in 2010, GTX has grown to become a leading global FX platform serving all corners of the institutional trading community. GAIN has been a wonderful steward over the last eight years and today’s transaction highlights our success executing on the business model and continuously delivering exceptional products and support to our clients. 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’s institutional business represented approximately 10% of the company’s total revenue and 14% of EBITDA in 2017. GTX has recently hired ex-Thomson Reuters Henry Durrant as Director of Liquidity Management.
Trading volumes at GTX cooled down in April by 14% to an average daily volume of $14.6 billion. Its current record volume was printed in February 2018, surpassing all the records of January and also previous months by a wide margin. Volumes came in at $16.1 billion, beating the January record by 16 percent from $13.9 billion and 46 percent year-on-year compared to February 2017.