General Atlantic, a major Saxo Bank shareholder with 22% of the company, is looking to cash in on the investment amid more than positive climate for this. Saxo Bank last week reported that it tripled its net profit in 2010 comparing with the same period in 2009. Saxo Bank has also been cleared of any wrongdoing by an independent research firm after being accused by a client for price manipulations and being investigated by the Danish FSA.
General Atlantic has been an investor in the company since 2005 and surely feels now that it is the perfect time to bank the profits. General Atlantic has reportedly paid $60 million in 2005 for 22% of Saxo Bank.
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Judging by the multiples which price FXCM at around $1 billion on a net profit $70 million we can estimate that Saxo Bank, which earned $120 million last year, may be worth at least $1.7 billion. Add to that its banking licenses and activities along with a vast asset management division which FXCM doesn’t have and an immensely popular software and white label clients and we are looking at a value of $2.0 billion if not more. If this is the case then General Atlantic’s stake may be worth around $400 million, which is x6-7 return on an investment within 5 years. Not bad.
Finanswatch the Danish paper with the report about the imminent sale goes as far as estimating Saxo Bank’s value at almost $4 billion, but this seems like a stretch.