GAIN Capital to acquire City Index 

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New York-based forex trading firm GAIN Capital Holding has entered into a definitive agreement to acquire City Index (Holdings) Limited, a leading online trading firm specializing in contracts-for-difference (CFDs), forex and UK spread betting, for approximately $118 million, or a net purchase price of $82 million, including $36 million in cash on the company’s balance sheet. The combination of GAIN Capital and City Index creates a global leader in online trading, operating two market-leading brands in GAIN’s FOREX.com, a top retail forex brand globally, and City Index, a premier CFD and spread bet brand.  The combined company will service 235,000 retail customers in over 180 countries with annual trading volumes of more than $3 trillion.

“The acquisition of City Index advances our growth strategy, creating scale for our retail business and accelerates the development of our innovative trading technology,” said Glenn Stevens, GAIN’s chief executive officer. “The combination will result in a balanced mix of customer volume, with approximately 61 per cent of retail volume coming from FX and 39 per cent from CFD trading in other asset classes such as equities, indices and commodities. We look forward to leveraging the City Index brand in key markets and working with the team at City Index, who share our commitment to creating a superior customer experience.”

“This transaction is a landmark moment in City Index’s 30-year history as a leader in retail trading,” said Mark Preston, City Index’s Chairman and Chief Executive. “The combination of GAIN’s unrivalled leadership in global foreign exchange with City Index’s internationally-recognized CFD business creates a world-class industry leader, providing the scale and capability to deliver the ultimate trading experience to our clients around the world. The combined business will also offer greater opportunities for City Index’s management and staff to flourish in a global business.”

Founded in London in 1983, City Index is today one of the world’s leading providers of CFDs and forex, offering more than 10,000 products across equity, index, FX, commodity and bond CFDs. City Index is majority owned by IPGL, the private holding company for the interests of Michael Spencer, Founder and Chief Executive of ICAP plc, the global markets operator.

“I am very pleased we have been able to agree to this transaction, which brings benefits for everyone,” said Michael Spencer. “I believe GAIN is an outstanding company and will be able to move City Index to the next level, by leveraging its broad array of trading products and services onto a global platform. We believe this combination will enhance GAIN’s leadership position in the FX/CFD industry by putting together two highly complementary companies to create significant value for customers and stakeholders. This is the latest example of the way that IPGL is able to invest actively in businesses over the long term to support their growth and development.”

The transaction follows the successful acquisition and integration of GFT, which closed in September 2013, where GAIN Capital achieved approximately $40 million of run rate expense synergies.

City Index clients will not see any immediate impact to the customer service they receive, their account administration or how they trade. All clients will receive more detailed information about the benefits the combined company can offer them, once the acquisition is completed.

Source: cpifinancial-GAIN Capital to acquire City Index

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