Retail FX and CFDs broker ThinkMarkets, and Canada based special purpose acquisition company (or “SPAC”) FG Acquisition Corp (TSE:FGAA.U) have announced that they have agreed on a “proposed business combination transaction” that will see ThinkMarkets go public on the Toronto Stock Exchange. The deal will give ThinkMarkets a pre-merger valuation of USD $160 million.

The parties revealed that ThinkMarkets has seen its Revenues grow from USD $35 million in 2019, to over $62 million in 2022. ThinkMarkets has a user base of 138,500 approved clients (as of March 2023), up from 17,200 at the end of 2015.

The ThinkMarkets announcement helps explain the timing of last week’s “big news”, that ThinkMarkets had settled a longstanding legal dispute with iS Prime, stemming from the 2017 sale of the company’s ThinkLiquidity B2B risk and liquidity business to iS Prime. Investment bankers much prefer a “clean” deal to sell, without any potentially large litigation hanging over the company’s head.

We’d also note that this is the third time in recent years that a Retail FX and CFDs broker has attempted to “go public” via a SPAC merger – with the previous two attempts ending in failure. Israel based eToro pulled its plans to go public via a merger with a NASDAQ listed SPAC last summer. And in December 2022 Copenhagen based Saxo Bank cancelled its SPAC-merger plans in Europe, that would have seen Saxo IPO’d at a roughly $2 billion valuation.

The Toronto Stock Exchange listed FG Acquisition Corp is controlled by Larry G. Swets Jr., a US-based casualty insurance executive. After the merger, the company will be known as ThinkMarkets Group Holdings Limited. The company will then be led by ThinkMarkets’ Co-Founders Nauman Anees, as Chief Executive Officer, and Faizan Anees, as President, and other members of ThinkMarkets’ current management team. The Corporation’s board of directors will consist of Nauman Anees, Faizan Anees, Larry G. Swets, Jr., Julian Babarczy, Andrew B. McIntyre, Peter Huitsing and Symon Brewis-Weston.

The parties expect the transaction to close in July 2023.

In addition to making ThinkMarkets a publicly traded company, the transaction will provide up to approximately $125 million in net cash proceeds to ThinkMarkets, available to pursue growth strategy in new markets and new products. FG Acquisition Corp currently has approximately $117 million of escrowed funds from its IPO, and the parties also announced the launch of an up to USD $20 million private placement of convertible debentures as part of the transaction. Investment bank Canaccord Genuity is acting as lead agent on the Private Placement.

Larry G. Swets, Jr., Chief Executive Officer of FG Acquisition Corp said:

“We are excited to present this qualifying acquisition to our shareholders and believe that ThinkMarkets provides a compelling investment opportunity in a multi-asset online brokerage with a global presence. We are confident that the ThinkMarkets team is positioned to take leadership in this segment and has demonstrated a clear path for growth. We look forward to supporting Nauman and the ThinkMarkets team as they begin their journey as a public company.”

ThinkMarkets Co-Founder and CEO Nauman Anees added:

“We are excited to start our journey as a public company with the support of FGAC and look forward to a new chapter of growth in the business.”

About ThinkMarkets

ThinkForex was established in 2010 by brothers Nauman and Faizan Anees in New Zealand, and relocated its headquarters to Australia upon obtaining ASIC licensing in 2012. ThinkForex rebranded as ThinkMarkets in 2016. The company has dual headquarters in Melbourne and London, where ThinkMarkets set up its FCA-licensed subsidiary TF Global Markets (UK) Limited in 2015. The firm also has licensed subsidiaries in South Africa established in 2019, in Cyprus (TF Global Markets (Europe) Ltd), and recently launched a Japanese licensed operation. ThinkMarkets offers trading on its proprietary ThinkTrader platform, as well as MT4 and MT5.