Australia-headquartered broker, ThinkMarkets, operated by Think Financial Group Holdings Limited, is going public with a reverse merger deal with Canada-listed blank check company, FG Acquisition Corp. The listing is expected to take place in July 2023.
ThinkMarkets Going Public
“We are excited to start our journey as a public company with the support of FGAC and look forward to a new chapter of growth in the business,” said Nauman Anees, the Co-Founder and CEO at ThinkMarkets. He will take over as the CEO of the merged entity, while the other Co-Founder, Faizan Anees, will become the President.
"The TSX and Canada offer a unique opportunity to allow the company to enter the public markets in an efficient manner. We also see a unique opportunity in Canada to offer our products and services in the future," Anees told Finance Magnates.
ThinkMarkets offers retail trading services and also has an institutional presence with a liquidity provisioning platform, which was launched in 2021. The latest announcement highlighted that the broker has 138,500 clients from across 165 countries. In addition, it grew at 24 percent CAGR and generated $62 million in revenue in 2022.
"The business is mostly retail, but our institutional business is also growing year over year," Anees added.
Apart from Australia, the broker has a strong presence internationally. Earlier this year, it bolstered its Asia Pacific presence by gaining a New Zealand license, which came a year after the broker launched services in Japan, a market it entered by acquiring a local FX firm.
A SPAC Deal
The confirmation of ThinkMarkets going public with a SPAC deal came after a failed Australia initial public offering (IPO) attempt in 2020. Then, an Australian media house reported that the broker raised $15 million in a pre-IPO funding round and was seeking to raise around $100 million with a market capitalization of $300 million. ThinkMarkets did not officially confirm that attempt.
Special purpose acquisition companies, or SPACs, were very popular a few years before. Promoters of these companies raised hundreds of millions only with the promise of a future partnership to take a company public. However, the bubble popped, pushing the stock prices of these companies down.
Many SPAC deals also collapsed recently as the popularity of these vehicles popped. Earlier, eToro, another major name in the brokerage industry, inked a similar SPAC. However, that deal failed as the two could not finalize the listing terms before the deadline.
"Our goal is not only further revenue growth, but to expand our share in the many markets we are already in and to continue to grow our ThinkTrader platform, which is gaining overall popularity each year with active traders. However, we are particularity excited about Japan, Middle East and expansion into Canada /US," said Anees.
Fair Valuation?
In the latest deal, ThinkMarkets has been valued at $160 million on a pre-money basis, with an implied pro forma enterprise value of about $190 million. Under the agreement, ThinkMarkets will become a wholly-owned subsidiary of the SPAC, and ThinkMarkets shareholders will hold the majority of the issued and outstanding Common Shares.
Additionally, the SPAC is going to offer $20 million in a private placement of convertible debentures for funding its growth strategy, working capital, and general corporate purposes.
“We are excited to present this qualifying acquisition to our shareholders and believe that ThinkMarkets provides a compelling investment opportunity in a multi-asset online brokerage with a global presence,” said Larry Swets, Jr., the CEO of FGAC. “We are confident that the ThinkMarkets team is positioned to take leadership in this segment and has demonstrated a clear path for growth.”
