Speaking to Forex Magnates’ reporters after the announcement about the acquisition of the client data of Alpari UK, the CEO of ETX Capital, Andrew Edwards, weighed in on the firm’s experience from previous acquisitions. He also shared information about the number of monthly active accounts of the future acquisition plans of the firm after a record breaking 2014.
ETX Capital closed a similar deal with Shelbourne markets in June last year, did the success from that acquisition put you in a position to consider the customer base of Alpari UK?
The acquisition of the customer base of Shelbourne Markets has been structured in a very similar way which was a part upfront and majority on success. That has proven to lead to positive results for both Shelbourne and ETX Capital. When we submitted the proposal to KPMG, we did use our Shelbourne deal as a template for our offer to acquire Alpari UK’s client base.
We were very upfront with the special administrator in communicating that there won’t be a significant initial payment, but we could get a better response from KPMG on success. I think the Shelbourne deal helped and gave us a level of confidence about how much we could pay for this acquisition.
You mentioned in the announcement that ETX Capital is going to expand its international customer base, is the majority of Alpari UK’s client base outside of the UK?
Alpari has a very similar mix of customers to ETX. Both brokers have been expanding internationally for the past five years. Currently, only 40% of our revenue is coming from the U.K. these days and the same can be said for Alpari. We are familiar with servicing multiple languages and multiple websites.
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What is the mix of international clients which you have acquired?
Alpari UK had a bigger presence in the Middle East than we have, which is positive for us. We both have presence in the Far East and Western Europe, but Alpari had a bigger German business than ETX Capital. We’re quite excited about what we can achieve in both Germany and the Middle East.
What has been the number of active accounts at Alpari UK?
There are roughly about 150,000 accounts of which about 80,000 had balances and Alpari had roughly 1,500 active accounts per month. We’re going to be targeting that whole customer list and we have different assumptions about what conversion rate from different segments of that base.
Are you looking for more acquisitions at this point in time?
Absolutely, we’re talking to a couple of smaller brokers who are struggling. That isn’t necessarily a result of the Swiss franc debacle. There are a number of companies which are struggling to continue supporting their business models. As I mentioned, we’re talking to a couple about acquiring their customer base and if we do a good job with Alpari we could be seen as the go to company for brokers who’d like to capitalize on the brand they created.
How has your 2014 been?
Our numbers are currently being audited, but we have had a very profitable, record 2014. We will be publishing our accounts later this year.