The catalyst may be the belief that Congress is certain to approve a hike in capital requirements to $20 million just months after it raised it from $1 million to $5 million.
FX Solutions is one company that appeared relatively well-placed to meet any looming capital hike. In its last filing with the Commodity Futures Trading Commission, the company’s net adjusted capital stood at $26.9 million. In early 2007, the company secured a $100 million investment from Francisco Partners, the US private equity house. Sources say this was for a 70% stake in the company, sold directly by its founders.
The New Jersey-based company has now agreed to be taken over by City Index, the well-known UK-based contracts-for-difference and spread betting company, owned by IPGL, Michael Spencer’s private investment vehicle. City Index also owns IFX and FinSpreads. City has had at best only a patchy operation in the US, and the takeover of FX Solutions gives it a beefed up presence in the market and some highly regarded technology.
No value was put on the all-equity takeover. Francisco Partners is now a shareholder of the City Index Group. The enlarged company has 400 staff in six offices in the UK, United States, China, Singapore and Australia.