FDCTech, Inc. (OTCQB: FDCT) has entered into a legally binding agreement to acquire 100 percent of Alchemy Markets DMCC (Alchemy UAE) and Alchemy Prime Ltd. (Alchemy UK), as well as 49.9 percent of Alchemy Markets Ltd. (Alchemy Malta), Finance Magnates learned exclusively. The three entities are collectively called Alchemy Group.

FDCTech already holds the remaining 50.1 percent stake in Alchemy Malta (formerly known as NSFX).

FDCTech to Acquire Alchemy Group

The agreement came after the two parties initiated negotiations on the deal in September last year. FDCTech (previously Forex Development Corporation) expects to close the merger in the next 30 days.

Technically, it's a reverse merger, and under the terms, FRCTech will issue 1,700,000 shares of its Series B Preferred stocks for the acquisition . As per the agreement, FDCT and Alchemy are to be valued at $35 million and $350 million, respectively. However, due to illiquidity of FDCT securities on the OTC Markets exchange, the company is not using its market price to determine the value of this transaction.

Further, upon the closure of the merger, the existing management team and Board of Directors of FDCTech will continue in their roles.

With its headquarters in the US, FDCTech provides financial technology infrastructure to OTC brokerages as well as proprietary and algo trading firms. As a part of its growth strategy, the company is acquiring and integrating small to mid-size legacy financial services companies.

In 2021, FDCTech acquired Genesis Financial, a financial services company with operations in wealth management and direct-to-customer lending, for $35 million.

A Strategic Deal for FDCTech

The latest deal with the Alchemy Group echoes the same strategy. According to FDCTech, it aims to establish a premier online trading and investment platform, targeting the European, Asian, and Australian markets.

The three entities of Alchemy Group are diversified in their services. Alchemy UAE primarily trades for proprietary accounts on regulated exchanges as an OTC market participant and provides liquidity to online brokers. Alchemy UK is licensed by the Financial Conduct Authority (FCA) and serves institutional clients. Lastly, Alchemy Malta is regulated on the island and offers retail brokerage services.

Following the merger, FDCTech will continue as a fintech acquisition and technology company. Alchemy will continue as a brokerage, but its financial performance will be reported under FDCTech, as a subsidiary. FDCTech additionally has plans to integrate its proprietary software more into Alchemy.

The press release shared with Finance Magnates detailed that Alchemy Group generated over $22 million in audited revenues and $12 million in net income in the fiscal year 2022. Its balance sheet is also robust, with over $20 million in net financial assets.

Furthermore, the presence of Alchemy Group in Europe, the Middle East, and other Asian regions will allow FDCTech to grow its footprint in those markets. FDCTech and Alchemy as a combined entity expects to meet the listing requirements of bigger exchanges by January 2024.