A leading global operator of a gold-based financial network, Goldmoney Inc., listed on the Toronto Stock Exchange (TSX) under ticker XAU, today revealed that it has entered into an agreement to acquire US-based precious metals dealer Schiff Gold Inc (SGI).
SGI is a retail gold dealer and caters to a sizable client base handling transactions related to precious metals, including storage and vaulting agreements, and IRA arrangement services for gold and silver. Last year SGI had sold $125 million worth of precious metals while grossing $2.8 million in profit, and XAU expects efficiencies to be unlocked for additional cost savings as part of acquiring the company.
Goldmoney has over a million users signed up, and 41,000 active clients reflecting $1.8 billion in assets and had reported nearly $260 million in revenues for its latest financial year which just ended. The acquisition is expected to close within 45 days, pending customary conditions and regulatory approval.
I’m thrilled to be joining the Goldmoney team.
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Joint Venture with Peter Schiff
Gold magnate Peter Schiff – founder of SGI – agreed to form a marketing and service agreement with XAU as part of the deal, upon closing of the transaction.
The deal includes a consulting agreement between Goldmoney and Euro Pacific Asset Management LLC, as part of a joint venture between Peter Schiff and Goldmoney, and involves roughly $5.3 million CAD worth of XAU shares (1,063,000 shares at $5 CAD) , as well as 1.4 million common share purchase warrants that can be exercised at different strike-prices over a ten-year period.
Commenting in an official statement, Mr. Schiff explained: “I’m thrilled to be joining the Goldmoney team. For my entire career I have sold gold to high net worth individuals looking to incorporate precious metals into otherwise diversified investment portfolios.”
Regarding the appeal of using Gold to diversify, Mr. Schiff said: “While the vast majority of investors have yet to make such an important allocation shift, it’s average individuals who actually have the most to gain by utilizing the protection of gold for day to day savings of income.”
Mr. Schiff concluded regarding the new deal with XAU: “The Goldmoney platform provides this utility, simple and transparent access to the best possible defense against theft by inflation. Technology is providing more choice and easier access to everything, and the hope is that market forces will compel central banks to provide a more competitive product and put the brakes on run-away-inflationism and the asset-bubble economics that is undermining living stands worldwide.”