OFX Group Limited announced on Monday that it has agreed to fully acquire Firma Foreign Exchange Corporation Headquarters in Canada. The two parties have agreed to the amount of CAD 90 million (around $69.65 million), which is nine times Firma’s last reported EBITDA.
Founded in 1998, Firma offers global foreign exchange services to corporate clients. Its primary products include spot and market orders, multi-currency accounts, payments and mass payments as well as forward contracts.
Additionally, the company has more than 9,600 corporate customers and operates from nine offices across Canada, Australia, the United Kingdom and New Zealand.
A Strategic Deal
“This is our first major acquisition and very much aligned with our strategy of building scale in the Corporate segment and growing the North American region,” said the OFX CEO and Managing Director, Skander Malcolm.
Indeed, the closure of the acquisition will add up to five years of organic growth to OFX’s corporate segment. The merged entity is expected to generate underlying EPS accretion of more than 20 percent in the first year and over 30 percent in the second year.
The acquisition will add significant volume in the trading of USD/CAD and USD/GBP pairs.
Malcolm added: “Firma generates strong earnings from a high-quality customer base and has an excellent service culture, so there is a lot of alignment with OFX. By bringing our business together, we become a much bigger Corporate specialist with a strong revenue base and considerable growth opportunities.”
To fund the acquisition deal, OFX will use an underwritten debt facility and existing cash. Furthermore, the company has detailed that it is planning to repay its debts in less than four years as it is expecting a strong cash flow from the combined entity.
“Our business is continuing to perform well, with the positive trends we drove in the first half continuing into this quarter. With the addition of Firma, we can accelerate that growth by combining our infrastructure and risk culture with their customer base and service excellence, delivering further profitable growth and value accretion for OFX shareholders,” Malcolm said.
