Gallant Capital Markets, the British Virgin Islands (BVI) based FX broker, has announced to Forex Magnates that it has agreed to merge with WSM Invest Ltd., a global financial services firm affiliate with multiple licenses to operate in Europe and Asia. The transaction is pending final regulatory approval in the British Virgin Islands, where Gallant is regulated by the Financial Services Commission (FSC).
Forex Magnate has learned that the cost of the M&A deal is at least $10.5 million (as an agreed upon floor for the deal) and the total maximum price is capped at $14.5 million, based on the achieved growth rate for the merged company over the next five years. According to the agreement, 50% of the sum has already been paid up front upon execution to Gallant Capital Markets.
The aim of the merger is to enable Gallant to expand its product offering globally and to create operating and technology efficiencies across the combined entities. It will facilitate Gallant white-label and other co-branding ventures in markets where WSM holds regulatory licenses. Gallant’s straight-through-processing (STP) model will also be rolled out across the combined company, expanding its tier-one FX liquidity, CFD, metals and options trading services globally.
“Gallant is a recognized leader among providers of STP FX liquidity as well as world-class technology,” said Salvatore Buccellato, Chief Executive Officer, Gallant Capital Markets, Ltd. “Merging with a firm of WSM’s caliber, resources and geographic reach will provide us with a powerful global market position from which to expand in the future,” he added.
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Details of the merged company’s name and structure are still being finalized, but speaking with Forex Magnates, Buccellato explained that the new firm will operate under the Gallant Capital Markets’ brand. In addition, Gallant’s technology will be integrated across the combined company creating a unified information technology backbone and driving operating efficiencies for all of the entity’s brokerages worldwide.
Buccellato said to Forex Magnates that he will remain the CEO of Gallant and might additionally become a director on the board of the WSM parent company. He also assured that nothing will change from the point of view of the existing Gallant clients. The goal of the merged broker will be to reach a monthly trading volume of sixty-five yards per month within two years, a goal Buccellato considers to be realistic as new white-label brokers are already in the process of going online. The BVI FSC capital requirements are set to grow from $100,000 to $1 million, putting it on a level with the U.K FCA, which Buccellato thinks also helps the Gallant brand as a BVI license holder.
WSM Invest Ltd. is a New Zealand-based stock company with bank licenses. It provides bank services to clients from all over the world. WSM Investments Group is the international parent conglomerate of the WSM Invest firm.
“WSM is excited about the prospective merger with Gallant,” Jiri Kubicek, Member of the Board, WSM Investments, commented on the announcement. Adding, “Gallant’s liquidity and technology solutions will strengthen and enhance our brokerage offerings, consolidating and expanding our leading market positions in Europe and Asia.”