FXCM Japan sale a done deal?


Forex acquisitions, FXCM, FXCM Japan, FXCM sale, Rakuten SecuritiesIn follow-up of our initial report about the impending sale of FXCM Japan, we bring to you further confirmation that FXCM Inc, has agreed to sell FXCM its unit in Japan. The subsidiary has been sold to the Japanese brokerage Rakuten for $62 million. This amount comprises of cash held on the balance of FXCM Japan which is $22 million. Rakuten Securities, will therefore presently employ the use of FXCM trading system for its legacy to FXCM Japan customers. Although the FXCM Japan sale has not been officially finalised yet, but once its done, Rakuten Securities will notify the customers appropriately.

Reports shows that the latest earnings call of FXCM undershot the prospective value of the Japanese subsidiary by close to $12 million. No doubt, this is an incredible step taken in a positive direction for FXCM Inc, since the brokerage still has the outstanding loan obligation to Leucadia.

The following is the FXCM`s Evaluation earnings for last month:

  • $22 million in net cash on balance sheet
  • $6.0 million in Adjusted EBITDA on a Non-GAAP basis in 2014
  • $62 million, after removing the $22 in net cash, they are paying 6.7X EBITDA.

Both parties have expressed satisfaction over the deal by their respective statements;

FXCM's CEO, Mr. Drew Niv expressed his satisfactory state by announcing the following:
“We are pleased to announce this transaction with Rakuten Sec, as they are an innovative and strong firm. We are confident that they will provide the same level of excellent service and trading environment that our account holders have experienced at FXCM.”

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Accordingly, Yuji Kusunoki, the President of Rakuten Securities commented briefly;
“We are delighted to invite FXCM Japan to Rakuten group. We believe that our combined capability will enhance our strategy to be the top FX service provider in Japan.”

The deal is expected to be sealed by April 1, 2015, subject to customary closing conditions. Moreover, the final purchase price will be based on FXCM Japan’s March 31, 2015 balance sheet.

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