Well it looks as if FXCM still does have some salable assets.
Continuing its parade of asset sales in order to repay its high-interest loan from Leucadia National Corp (NYSE:LUK), retail forex broker FXCM Inc (NASDAQ:FXCM) has sold its very popular research, education and market news website DailyFX to UK online trading giant IG Group Holdings plc (LON:IGG) for $40 million. Cash of $36 million will be paid to FXCM on closing, with the additional $4 million to be paid on completion of certain migration requirements.
DailyFX is a very popular website among both retail and institutional traders. According to SimilarWeb, Daily FX gets about 4.2 million unique visits per month.
FXCM still owes Leucadia about $193 million (as of June 30) from its initial $300 million loan taken in January 2015, which helped FXCM stay afloat after the surprise Swiss Franc spike of January 15, 2015, which saw FXCM take a $276 million hit. So, the $40 million from the sale of DailyFX will go a long way toward paying down the loan. According to FXCM, after using the net proceeds from the DailyFX sale there will be about $153 million outstanding on the Leucadia loan.
The DailyFX websites currently support eight languages: English, French, German, Italian, Spanish, Greek, Arabic and Chinese, with the client recruitment centered in related geographic regions. IG will take on 34 employees associated with DailyFX, as well as ownership of all of the assets associated with delivering the full service to current and potential clients, including journalistic and support staff, subscription lists, source code, all relevant domain names and all intellectual property rights.
For an agreed annual fee, FXCM will continue to advertise on the US site and will take ownership of any US and Canadian domiciled leads that this advertising generates. According to SimilarWeb data, DailyFX gets about 20% of its hits from US visitors and another 6% from Canada, so that is still a fairly big chunk of DailyFX’s business and value.
IG expects that running DailyFX will add around £5 million to annual operating costs.
Peter Hetherington, IG
Peter Hetherington, CEO of IG said:
We are extremely pleased to have had the opportunity to purchase what we consider to be the leading global client recruitment resource in the FX environment, an asset type where IG is very strong, but historically underweight. This brings to IG an exceptional proven platform for both acquiring new clients and further engaging our entire current global client base, along with a number of very talented people. This transaction further underpins our commitment to continuing to provide the best client experience in our industry.
FXCM CEO Drew Niv said of the DailyFX sale:
While DailyFX is a high quality asset and was not a targeted asset to sell, the opportunity came along and it was something we felt we should take advantage of. At this time, we do not plan on selling any other retail FX assets and believe the remaining assets held for sale satisfy the remaining debt outstanding to Leucadia.