GAIN Acquisition Gets StoneX $82 Million ‘Bargain Purchase’ Benefit

StoneX Group Inc (NASDAQ:SNEX), formerly known as INTL FCStone, has published its quarterly financial results, ending on September 30, the first time after completing its acquisition of .
Along with an excellent increase in quarterly operating revenue and income, the company recognized an $81.8 million bargain purchase on the acquisition of GAIN Capital.
“The bargain purchase gain is non-taxable, and accordingly there is no corresponding income tax provision amount recorded related to this gain,” StoneX noted.
StoneX decided to purchase GAIN Capital, which operates , for approximately $236 million in an all-cash deal, paying $6 per GAIN share. The process was , meaning all the transactional benefits were accounted for in the last quarter’s financials.
The acquisition amount in the quarterly books included the $9.6 million acquisition-related fees to investment banks and lawyers and another $5.7 million in impairment charges related to capitalized software not yet placed into service.
Record Quarterly Numbers
Coming to the quarterly results of , the publicly-listed company reported a total quarterly operating revenue of $342.1 million, which is a yearly increase of 19 percent, and the net came in at $226.2 million, which is 30 percent higher than the previous year.
The quarterly net income of the company leapt 185 percent to $77.4 million. In a similar quarter of last year, StoneX reported a net income of $27.2 million.
Additionally, the FX contract business of the company recorded a 725 percent jump in revenue. In absolute terms, Q4 revenue from this business segment came in at $48.7 million compared to last year’s $5.9 million.
“We achieved record results on a consolidated basis and in nearly every business area, completed several transactions, including the major strategic acquisition of Gain Capital Holdings, Inc. (“Gain”) and rebranded the company with an eye toward our future,” StoneX Group CEO, Sean M. O’Connor said.
“…we realized a significant amount of non-operating income during the quarter, primarily resulting from the gain on acquisition relating to the Gain transaction.”