U.K. online payment services provider FairFX Group Plc acquired the entire issued ordinary share capital of City Forex Ltd. for a cash consideration of £6 million.
The initial consideration for the deal will be £5.25 million, with the remaining £750,000 to be paid nine months after the transaction's close. The consideration, subject to adjustments for cash and working capital, will be paid from FairFX's existing cash resources.
The U.K. Financial Conduct Authority has approved the transaction.
City Forex's service offering is mainly focused on two products, international payments and travel currency, which are accessible to business and consumer segments through its proprietary platform and three branches in London.
The company, which has been a partner of FairFX since 2007, provides the operations for the latter's travel currency service. FairFX said it expects City Forex's international payments business to provide economies of scale from banking partners when combined with the group's existing volumes. As part of the deal, City Forex's platform will be combined with FairFX's existing platform to yield further efficiencies for the group, as well as increased capacity for growth.
FairFX said the acquisition would immediately improve its earnings, noting that the opportunities for revenue enhancement from cross-selling FairFX products to City Forex customers are considerable, particularly for the group's corporate expense card and platform.
FairFX added that the deal fits with its core growth aims, namely increasing economies of scale while adding product innovation.