FXall files for an IPO
This is obviously quite an interesting time to be filing for a public offering, when most IPO activity has been halted due to a very volatile (and mostly negative) equity capital market, especially involving financial-related stocks. Also, FXall has not exactly been “hitting the cover off the ball” – although its first half 2011 revenues of $57.0 million were 19% above last year, net income decreased slightly to $5.8 million. However, FXall seems to be getting in line to go public either later this year or early next, when conditions allow.
Although the company did not list a specific transaction size or valuation, based on a review of the prospectus we estimate that:
- Offering Size – is planned to be in the range of $75-100 million, based on the company’s filing fee.
- Company Valuation – is targeted to be in the $400 million range, pre-IPO, based on the company currently having 28.3 million shares outstanding, and a typical IPO price in the low to mid teens. (Note that both FXCM and Gain Capital filed with $13-$15 price ranges for their IPOs, with FXCM’s eventually pricing at $13, and Gain Capital at $9 per share. Both those companies’ share prices trade below the original IPO price). As well, an offering size of $100 million would fit a planned valuation of $400 million – IPO’ing shares representing 25% of the company for a company this size is about industry standard.