The announcement of the Tradestation – IBFX acquisition deal obviously generated much interest and discussions in the industry. Main question was whether indeed the price was a mere $17 million. Several of my sources mentioned that Gain may have eventually withdrawn from the deal I announced 2 months ago because there is a pending NFA fine against Interbank FX. Apparently IBFX may be soon fined for some execution flaws – however this has not been announced by the NFA yet so we have no way of knowing whether this will eventually happen.
I managed to speak to Salomon Sredni – TradeStation’s CEO – who was nice enough to find time to chat with me over the phone. The price TradeStation will pay IBFX owners is indeed about $17 million. However the previous owners will also take home all the cash that was in the company – about $24 million.
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So eventually Todd Crossland and Spectrum Equity will share about $41 million between themselves. It would be very interesting to see how exactly they will split this – but we may never know. Spectrum invested $40 million in IBFX few years ago and probably put a protection mechanism in place giving them the first $40 million back. However when IBFX hit the losing streak and a decision to sell the company was made it’s a safe bet to assume that this protection mechanism was altered. Spectrum probably won’t take the full $40 million otherwise it wouldn’t have made sense for Todd to sign off on the deal.
In any case, TradeStation and Monex have big plans to expand and they view the American market as a great opportunity. The smaller the market gets due to consolidation the more accounts each of the remaining brokers will be getting.
TradeStation will keep offering its own platform as well as Interbank’s MT4 and clients will be able to choose which platform they prefer.