In a bid to expand its business in the Foreign Exchange (Forex) market, Deutsche Boerse AG has entered into a "definitive agreement" to buy 360T, a global Foreign Exchange Platform, for €725 million or more than $795 million, according to Deutsche Boerse's press release.
Deutsche Boerse aims to further accelerate 360T's organic growth trajectory in the Forex market. The company also expects a "double-digit million Euro synergies" by midterm with Deutsche Boerse's expertise and capabilities in international distribution.
Bloomberg reports that Forex companies are looking to diversify into other asset classes. The acquisition of 360T allows Deutsche Boerse to offer more to its clients.
"We're entering an asset class that we don't have in our portfolio at present and which we believe is promising," Frank Herkenhoff, a Deutsche Boerse spokesman, said to Bloomberg.
The competition to provide Forex market trading platforms has been increasing, as a lot of operators are looking to get a slice of the $5.3 trillion-a-day-market.
Reuters report that Deutsche Boerse and other major exchange group is expecting the Forex market to be more heavily regulated in the near future. They are positioning themselves to take a role in the market.
Deutsche Boerse, though, has focused mostly on complicated instruments like options and futures, instead of the spot currency transactions that make up the $5.3 trillion-a-day-market.
The acquisition, which is subject to the approval of the competition and supervisory authorities, plans to be financed via debt and equity, with the aim to "minimize a potential impact on credit rating," according to Deutsche Boerse's press release.
"The transaction is expected to be immediately accretive to cash earnings per share without synergies and will meet customary ROI targets upon realization of the midterm synergy targets," the company said.
The agreement was signed by Deutsche Boerse AG and shareholders of 360T Beteiligungs GmbH, including Summit Partners 360 S.a.r.l.
