FG Acquisition Corp. Announces Qualifying Acquisition with Think Financial Group Holdings Limited
/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/
All amounts expressed in United States dollars (US$) unless otherwise noted
- One of the fastest growing online and leveraged trading multi-asset brokerages globally, with 24% revenue CAGR since 2017
- Offers over 10,000 cash equity and CFD products to 138,500 clients in 165 countries
- Strong shareholder alignment with team led by Co-Founders Nauman Anees and Faizan Anees
- Combined pro forma implied enterprise value of approximately $190 million
- Transaction and proposed private placement to provide up to approximately $125 million in net cash proceeds available to pursue growth strategy in new markets and new products
- Completion of transaction expected in July 2023, subject to regulatory approvals and other customary closing conditions
TORONTO, May 12, 2023 /CNW/ - FG Acquisition Corp. (TSX: FGAA.U) (TSX: FGAA.WT.U) ("FGAC" or the "Corporation"), a special purpose acquisition company, and Think Financial Group Holdings Limited ("ThinkMarkets") are pleased to announce the proposed business combination transaction (the "Business Combination") between FGAC and ThinkMarkets. The Business Combination will constitute FGAC's qualifying acquisition.
"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," said Larry G. Swets, Jr., Chief Executive Officer of FGAC. "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."
In connection with the closing of the Business Combination ("Closing"), the Corporation intends to rename itself ThinkMarkets Group Holdings Limited.
Following Closing, the Corporation will 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 Corporation also announces the launch of an up to $20 million private placement (the "Private Placement") of convertible debentures (the "Debentures") to fund the Corporation's growth strategy, working capital and for general corporate purposes. The funds from the Private Placement will be in addition to any remaining funds from FGAC's approximately $117 million of escrowed funds.
FGAC's currently issued and outstanding Class A restricted voting shares (the "Class A Restricted Voting Shares") and share purchase warrants (the "Warrants") are listed on the Toronto Stock Exchange (the "TSX"). In addition, the Corporation has 2,875,000 Class B shares (the "Class B Shares") issued and outstanding. It is a condition of Closing that the Common Shares (as defined below) be listed and the Warrants continue to be listed on the TSX. The Corporation has reserved the symbols "TGH" and "TGH.WT" for the Common Shares and Warrants, respectively.
With clients in over 165 countries, ThinkMarkets operates in the leveraged and online trading industries, providing its customers with access to over 10,000 CFDs, including but not limited to, equities, currencies, precious metals, indices, commodities, ETFs and other trading products. ThinkMarkets has benefited and currently benefits from increased market volatility, and remains well positioned to continue its capture of market share in the evolving global trading landscape. ThinkMarkets has attracted and retained clients by providing them with an advanced trading platform, ThinkTrader, through a proprietary mobile trading app, as well as transparent pricing and proprietary trading tools.
ThinkMarkets is set to benefit from expansion into new markets with five new licenses acquired in the past three years, continued growth of its product offerings, and enhancement of its proprietary trading platform, ThinkTrader. ThinkMarkets' recent entry into Japan provides a platform to serve one of the largest FX trading hubs globally.
ThinkMarkets has seen significant revenue growth from $35 million in 2019 to over $62 million in 2022. Similarly, ThinkMarkets' investments to scale its business have yielded multiple margin expansion opportunities through its broadened user base of 138,500 approved clients as of March 2023 up from 17,200 at the end of 2015, which, combined with revenue growth, are expected to drive significant margin expansion.
FGAC and its sponsors, FGAC Investors LLC and CG Investments VII Inc. (the "Sponsors"), have entered into a business combination agreement (the "Business Combination Agreement") with ThinkMarkets dated May 12, 2023 whereby the Corporation will acquire, directly or indirectly, all of the equity interest of ThinkMarkets.
In consideration for the acquisition of ThinkMarkets, common shares of the Corporation (the "Common Shares") and Common Share purchase warrants will be issued to the existing shareholders of ThinkMarkets, and such additional consideration as may be required pursuant to the terms of the Business Combination Agreement. The Business Combination values ThinkMarkets at $160 million on a pre-money basis and implies a pro forma enterprise value of approximately $190 million. As a result of the Business Combination, ThinkMarkets is expected to become a wholly-owned subsidiary of the Corporation. Following Closing, the shareholders of ThinkMarkets will hold the majority of the issued and outstanding Common Shares.
The Business Combination is subject to the satisfaction of customary conditions, including the approval of the TSX, and approval of certain amendments to the Corporation's articles by its shareholders entitled to vote thereon at the Meeting (as defined below). Completion of the Business Combination is currently expected to occur in July 2023.
In connection with the Private Placement, which will be marketed prior to Closing, the Corporation will be offering of up to $20 million of Debentures. The Debentures will be convertible into Common Shares at an implied conversion price of $12.00 per Common Share and shall bear interest at a rate of 8.0% per annum, paid semi-annually. The Debentures will be unsecured and subordinated to current and future liabilities of the Corporation. The closing of the Private Placement is expected to occur contemporaneously with the Closing. The Private Placement will be subject to customary conditions, including the closing of the Business Combination.
Pursuant to applicable rules, the Corporation will file with the Canadian securities regulatory authorities in each of the provinces and territories of Canada (other than Quebec) a preliminary non-offering prospectus containing disclosure regarding ThinkMarkets and the Business Combination. Once filed, the preliminary prospectus may be viewed by shareholders and interested parties under FGAC's profile on the System for Electronic Document Analysis and Retrieval ("SEDAR") at www.sedar.com.
In connection with the proposed Qualifying Acquisition, the Corporation will call a special meeting of the shareholders of the Corporation (the "Meeting"). At the Meeting, shareholders entitled to vote will be asked to consider and approve (a) an amendment of the articles of FGAC to: (i) provide that the Corporation's outstanding Class B Shares automatically convert into Common Shares on Closing rather than proportionate voting shares; (ii) create a class of preferred shares, issuable in series; and (iii) remove the Class A Restricted Voting Shares, Class B Shares and proportionate voting shares, (b) the adoption of an omnibus equity incentive plan, and (c) the approval of an extension of FGAC's permitted timeline to complete its qualifying acquisition.
Goodmans LLP is acting as legal counsel to the Corporation and Canaccord Genuity Corp. is acting as financial advisor. Norton Rose Fulbright Canada LLP is acting as legal counsel to ThinkMarkets. Canaccord Genuity Corp. is acting as lead agent on the Private Placement.
Further details are set out in an investor presentation (the "Investor Presentation") and the Business Combination Agreement, which will be filed under FGAC's profile on SEDAR at www.sedar.com.
FG Acquisition Corp. is a special purpose acquisition company incorporated under the laws of British Columbia for the purpose of effecting, directly or indirectly, an acquisition of one or more businesses or assets, by way of a merger, amalgamation, arrangement, share exchange, asset acquisition, share purchase, reorganization, or any other similar business combination involving the Corporation. Kyle Cerminara serves as Chairman, Larry Swets, Jr. serves as Director and Chief Executive Officer, and Hassan R. Baqar serves as Director and Chief Financial Officer of the Corporation. In addition, Robert I. Kauffman, a former co-founder and Principal of Fortress Investment Group, serves as a Senior Advisor to the Corporation. The Corporation received $115 million of proceeds from its initial public offering which was completed on April 5, 2022 and the closing of the over-allotment option granted in connection with such initial public offering which was completed on April 20, 2022. The gross proceeds of the offering were placed in an escrow account with TSX Trust Company immediately thereafter and will be released upon consummation of the Qualifying Acquisition in accordance with the terms and conditions of the escrow agreement.
Established in 2010 by Nauman Anees and Faizan Anees, ThinkMarkets is a global online multi-asset trading brokerage with 230 employees and offices around the world servicing clients 24/7. ThinkMarkets services clients from over 165 countries by providing them the technology and access to over 10,000 tradable instruments, on everything from FX, Indices, Energies, Precious Metals, Equities and more. Traders are empowered with opportunities across a wide range of global financial markets on ThinkMarkets' award-winning trading platform, ThinkTrader. For more information, visit https://www.thinkmarkets.com.
Certain statements in this news release are prospective in nature that constitute forward-looking information and/or forward-looking statements within the meaning of applicable securities laws (collectively, "forward-looking statements"). Forward-looking statements include, but are not limited to, statements concerning the completion and proposed terms of, and matters relating to, the Business Combination, the Private Placement, the level of share redemptions, the listing of common shares and warrants on the TSX, the expected impact of the Business Combination on the business of ThinkMarkets, and ThinkMarkets' business plans, strategies and growth prospects, and use of proceeds, as well as other statements with respect to management's beliefs, plans, estimates and intentions, and similar statements concerning anticipated future events, results, outlook, circumstances, performance or expectations that are not historical facts.
Forward-looking statements generally, but not always, can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "could", "would", "will", "expect", "intend", "estimate", "forecasts", "project", "seek", "anticipate", "believes", "should", "plans" or "continue", or similar expressions suggesting future outcomes or events and the negative of any of these terms.
Forward-looking statements reflect management's current beliefs, expectations and assumptions and are based on information currently available to management. With respect to the forward-looking statements included in this news release, the Corporation has made certain assumptions with respect to, among other things, approval of various matters by the shareholders of the Corporation, the number of Class A Restricted Voting Shares that will be subject to redemption in connection therewith, the anticipated receipt of any required regulatory approvals and consents (including the approval of the TSX and applicable securities regulatory authorities) and the satisfaction and/or waiver of the various closing conditions to the Business Combination, the success of the Private Placement, the expectation that no event, change or other circumstance will occur that could give rise to the termination of the Business Combination Agreement or the Private Placement, the expenses and timing of Closing, that ThinkMarkets is capable of meeting and will meet its future objectives and strategies, that ThinkMarkets' future projects and plans are achievable and will proceed as anticipated, ThinkMarkets' competitive position in its industry, the evolution of the market for trading in financial products in Australia, Asia and elsewhere, the impact of prevailing conditions in the global financial markets on client trading patterns, ThinkMarkets' ability to successfully predict and respond to client preferences and demand, changes in consumer preferences and cultural attitudes towards trading in financial products, ThinkMarkets' ability to protect its intellectual property, availability of favourable regulations affecting the industry and markets in which ThinkMarkets operates, competition, including from established and future competitors, ThinkMarkets' ability to attract and retain management and other employees who possess specialized knowledge and technical skills, as well as assumptions concerning general economic and market growth rates, currency exchange and interest rates and competitive intensity.
Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated or implied by such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur. By their nature, forward-looking statements involve known and unknown risks and uncertainties and other factors that could cause actual results to differ materially from those contemplated by such statements. Factors that could cause such differences include, but are not limited to: conditions precedent required for the Business Combination or the Private Placement not being satisfied and/or waived; approvals required for the Business Combination and the Private Placement not being obtained; the potential benefits of the Business Combination not being realized; risks related to the achievement of the Corporation's business objectives; the Corporation not maintaining growth in the future; unfavourable economic conditions adversely affecting the Corporation's operations; the interests of the Corporation's directors and officers being different from or in addition to the interests of shareholders; the Business Combination being terminated in certain circumstances; the Corporation's results of operations and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict; the Corporation being unable to retain existing clients or attract new clients; the introduction of new, or changes to existing, products and services by the Corporation failing to attract or retain clients or generate growth and revenue for the Corporation; the Corporation having to comply with extensive, complex and changing laws and regulations across several jurisdictions; and the risks set out under the heading "Risk Factors" in the Investor Presentation and to be set out in the preliminary prospectus. This list is not exhaustive of the factors that may impact the forward-looking statements. These and other factors should be considered carefully and readers should not place undue reliance on the forward-looking statements in this news release. As a result of the foregoing and other factors, there can be no assurance that actual results will be consistent with these forward-looking statements.
All forward-looking statements included in and incorporated into this news release are qualified by these cautionary statements. Unless otherwise indicated, the forward-looking statements contained herein are made as of the date of this news release, and except as required by applicable law, the Corporation does not undertake any obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
The securities to be issued in connection with the Private Placement have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or any U.S. state securities laws, and may not be offered or sold in the United States (as such term is defined in Regulation S under the U.S. Securities Act) without registration under the U.S. Securities Act and all applicable state securities laws or compliance with the requirements of an applicable exemption therefrom. This press release shall not constitute an offer to sell or the solicitation of an offer to buy securities in the United States, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
SOURCE FG Acquisition Corp.
Released May 12, 2023