Updated details of FXCM/ODL acquisition unveiled
Previously I reported that FXCM acquired ODL for only 3.5% of its shares, deal that was valued back then at
Previously I reported that FXCM acquired ODL for only 3.5% of its shares, deal that was valued back then at $23.6 million. I hence deduced that FXCM’s value was around $676 million pre-money.
It seems that FXCM have updated these figures in their final pre-IPO filing.
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FXCM now state that ODL was acquired for $2.2 million and cash and %5.25 of FXCM valuing the deal at $54.9 million. This means that at the time of ODL’s acquisition FXCM valued itself at $1.003 billion. FXCM was valued $1.05 billion at the IPO after raising $210 million – that is $840 million before the money.
Pretty neat deal for FXCM which received about $190 million in assets (including $163 million in client funds) even though it had to write off about £12.6 million in unrecoverable debt and inject $9.4 million to strengthen ODL’s balance sheet.
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We may as well post all the financials for ODL. There is a reason that property went so cheap. 2009 revenue of $64m, operating expenses of $88m for a pretax loss of $23m.
And trends were bad. In the first 9 mos of 2010, revenues were only $38m, expenses were $56m for a pretax loss of $19m
ODL lost a shitload of money trying to muscle their way into the China market where they got screwed royally by smart Chinese IBs. They wanted to take over the market and were paying crazy rebate to IBs which essentially killed their profit margin. The business model was that they would bring in all the big high-profile IBs on board by paying high and then everyone else would follow. However it backfired and they lost their shirt. Chinese IBs will bleed you dry if you pay too much or have very relaxed terms. They will deliver clients that will do… Read more »
MC, thats a fair comment but in China there is a huge chain of introducers which needs to be paid. I dont think China was the underlying factor with ODL, I think when your selling everything and everything (futures, cfd, dma cfd, spread betting, options, fx options, fx ecn, fixed income, corporate finance) then there is alot of cash used up in admin, etc etc
ODL was a great firm however the recession and regulatory pressure probably put pressure on the cashflow.
There was a time when ODL was the main MT4 provider based in UK. This itself bought in substantial revenue.