OFX to acquire 100% of Canadian Corporate foreign exchange business Firma
Foreign Exchange Corporation (Firma)
20 December 2021 – OFX Group Limited (OFX) today announces that it has entered into an agreement to acquire 100% of Firma Foreign Exchange Corporation (Firma) for a total consideration of C$90m (A$98m).
Based in Edmonton, Canada and founded in 1998, Firma is a global foreign exchange service provider servicing Corporate clients. As at 30 September 2021, Firma had 194 employees, over 9,600 Corporate customers and operates from 9 offices in Canada, Australia, the UK, and New Zealand.
Firma’s key products include spot and market orders, multi-currency accounts, payments and mass payments and forward contracts. The company has strong commercial expertise and will significantly add to OFX’s volumes in major currency pairs such as USD/CAD and USD/GBP, diversifying its currency flows as well as the industries its Corporate segment currently serves.
The acquisition delivers incremental revenue to OFX’s Corporate segment of 93% and to its North America region of 121%1, representing more than five years of organic growth. With combined LTM to September 21 pro-forma Group revenue of A$186.5m and EBITDA of A$55.1m, OFX will be a major specialist Corporate cross border payments provider in Canada.
OFX Chief Executive Officer and Managing Director, Skander Malcolm said: “This is our first major acquisition and very much aligned with our strategy of building scale in the Corporate segment and growing in Canada and the North American region. Firma generates strong earnings from a high-quality customer base and an excellent service culture, so there is a lot of alignment with OFX in terms of strategy and values.
We are excited to bring our businesses together to better serve Canadian clients. We see significant opportunities to invest and grow our footprint and team in the region.
Our intent is to learn from the Firma team and leverage their strengths as they transition to be part of the OFX team.” Mr Malcolm added.
The combined business will continue to operate in Edmonton and other Canadian cities, including Toronto, where OFX Canada is headquartered.
OFX expects to deliver significant benefits to Firma clients through leveraging its global technology platform, its larger footprint of licenses, as well as an enhanced product offering. Benefits of scale and technology will also result in operating cost efficiencies such as lower banking fees.
Mr Malcolm concluded: “Our business is continuing to perform well, with the positive trends we drove in the first half continuing into the third 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.”
This is OFX’s second investment in its Canadian presence in recent times. In September 2021, OFX signed a multi-year North American sponsorship with the NHL, becoming the NHL’s Official Currency Exchange Provider.
— Agreement to acquire 100% of Firma for a total consideration of C$90m (A$98m), representing 9.0x Firma’s last-twelve-months (LTM) EBITDA to 30 September 2021
— Firma is a global foreign exchange service provider based in Canada, providing spot and forward products to Corporate clients
— Provides OFX with greater scale in the Corporate segment and North America region, adding over 9,600 clients and increasing OFX’s North America revenue by 121%
— Expected to deliver underlying EPS accretion of c. >20% in Year 1 and >30% in Year 2, with significant opportunities for cost and revenue synergies
— Funded from an underwritten debt facility and available cash, expected to be repaid within four years from completion
— Completion expected in first quarter of FY23, subject to customary approvals
1Based on OFX LTM to September 2021 Fee and Trading Income (Revenue) ex-slippage; growth calculated excluding synergies