| Fexco acquires Thomas Exchange Global, London’s largest specialist forex business |
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15th August 2018: Fexco today announced the acquisition of London’s leading retail foreign exchange (FX) company, Thomas Exchange Global (TEG). The deal strengthens Fexco’s position as the largest independent FX operator in the UK where it holds 12% of a £9 bn market. The acquisition of TEG which serves over 1 million customers in London across its 15 prominent branches also positions Fexco as the largest independent FX operator in the city, a statement from Fexco said.
Fexco has been on the acquisition trail in the UK retail foreign exchange sector for a number of years, and this is its latest acquisition. |
Key takeaways from the deal include:
- Fexco now holds 12% of the UK travel money market, with 4 million customers
- Acquisition of Thomas Exchange Global is Fexco’s eighth in the UK since 2012
- Preference for cash within travel money mix remains strong among customers who are cautious of moving towards a cashless society.
- Thomas Exchange Global serves over 1 million customers in London across its 15 prominent branches
The deal represents Fexco’s eighth successful acquisition in the UK since 2012. During that period Fexco has grown its share of the UK market from zero to 12% through an acquisition strategy 'executed at attractive multiples', generating significant returns over accelerated payback periods for the Group. Fexco’s Retail FX division now employs 500 people serving the Travel Money requirements of 4 million+ customers through its UK and Ireland network of 125 branches.
Commenting on the deal, Joe Redmond, Managing Director Retail Foreign Exchange Division, Fexco, said:
“We are very pleased to have acquired a business with the reputation and reach of Thomas Exchange Global, the largest London-based FX retailer. Fexco now holds 12% of the high street foreign exchange market in the UK – a market conservatively estimated at ?9billion in value.
“Following recent outages across major card schemes along with the rise in fees charged by banks when using cards abroad, customers are increasingly seeing benefits in the convenience, reliability, security, anonymity and value that foreign cash provides. This explains why our transactions and revenues are growing rapidly every year, and why there are more banknotes in circulation today than ever before.
“The deal confirms our belief in the future of cash and the incomparable role it plays in a balanced payments and travel money portfolio.”
In a survey of its customers Fexco found that 90% confirmed they would be using cash in five years’ time with only 15% considering travelling without cash. Customers surveyed stated that 64% of their ‘at destination’ spend was made in cash. Fexco’s UK customers were asked to consider if Brexit was likely to affect their travel plans in anyway, 70% said ‘no’.
TEG vendors, Sakthi Ariaratnam and Kurange Perera (Sandy), recognised a period of strong growth and expansion for the company over the past decade. Post completion, Sandy will exit the business while Sakthi Ariaratnam will remain in the company to advise on the transition.
Sakthi Ariaratnam, CEO and Director of Thomas Exchange Global said:
“We, at Thomas Exchange Global, are delighted to become part of the Fexco Group. Fexco’s interest in the company is testament to the quality of the business and the strong growth we have achieved over the years. This deal presents a fantastic opportunity for Fexco and Thomas Exchange Global to further capitalise on the significant opportunities present in the national and international FX marketplace. We look forward to working closely with Fexco in facilitating the next stage of growth for the company.”
The shareholders of Thomas Exchange Global were advised by Simon Blake, partner at Price Bailey Strategic Corporate Finance. Commenting on the sale, Simon Blake said:
“We are delighted that the owners of Thomas Exchange Global have been able to achieve a successful outcome with Fexco and this deal highlights a very positive transaction within the foreign exchange marketplace. The deal also demonstrates that post the EU Referendum there is still appetite from overseas companies to take advantage of acquisition opportunities in the UK on a significant scale.”
Legal advice to the sellers was provided by James Paton-Philips from Irwin Mitchell. Fexco was advised by PwC and Pinsent Masons. |
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