German broker NAGA today said it has finalized its merger with Key Way Group Ltd., which operates under the CAPEX.com brand.
Back in April, the Extraordinary General Meeting of NAGA shareholders had given the green light for the merger with CAPEX.com with a vote of 99.81%. The resolution will be implemented after the regulatory clearance, with the transaction finally conclude by the end of August 2024.
The merger will create one of “the world’s leading neo-brokers,” with around 1.5 million users across more than 100 countries.
The migration of users from Key Way Group’s trading platform, CAPEX.com, to the NAGA ecosystem is set to begin soon.
NAGA expects to save up to EUR 9.0 million a year from user migration, operational synergies, and licensing efficiencies. As the migration moves forward, using common technology across the group is said to add around EUR 4.0 million to EBITDA annually.
More savings are likely in areas like regulatory, personnel, trading, and customer acquisition costs. The integration is also expected to boost profits by increasing the lifetime value of CAPEX.com users with features like social trading, neo-banking, and crypto trading.
Octavian Patrascu, CEO of The NAGA Group: “I’m thrilled about the successful merger and the new opportunities it brings. We’ve executed this as planned, setting the stage to focus on synergies and drive growth. At the new NAGA, maintaining our startup DNA is essential – we’re committed to moving fast, staying innovative, and challenging the status quo with our products while embracing the efficiencies and processes of a larger, more structured organization. Our team is energized and aligned as we embark on this new chapter, and we’re excited about the road ahead.”
NAGA has recently made a series of new additions to its top management team, hiring new executives for key leadership positions, with Michael Milonas taking on the role of Group CEO. Additionally, NAGA appointed Sam Chaney as the Chief Commercial Officer (CCO), responsible for driving global growth in emerging markets.
For the 2023 financial year, the group’s brokerage business revenue was reported at €45.5 million. This figure represents a +20 percent decline from the previous year’s revenue of €57.6 million. However, the company’s EBITDA showed a marked improvement, reaching around €7 million, a sharp contrast to the previous year’s loss of €-13.7 million.
Meanwhile, the broker optimized its user acquisition strategy, reducing its marketing and sales spending. In the first nine months of 2022, the company spent approximately €26 million, while in 2023, this figure was trimmed to just €4 million for the same period.
Interestingly, the average net acquisition cost per new account dropped from €1,269 in 2022 to €181 in 2023. Despite the reduced budget, NAGA Group acquired around 10,000 new funded accounts in the first three quarters of 2023, only 19% less than the previous year.
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