Penson Worldwide, Inc. (NASDAQ: PNSN), a leading provider of execution, clearing and technology services for global financial markets, announced today the acquisition by its futures subsidiary, Penson GHCO, of First Capitol Group LLC (FCG), of Platteville, WI, a leading U.S. futures commission merchant.
The purchase price was approximately $10.8 million, including approximately $8.6 million in cash and $2.2 million in stock, or approximately 149,000 shares, based on the average closing price for the last five days. The acquisition agreement also includes performance-based cash earn out provisions for three years. Initially, the acquisition is anticipated to be non-material to Penson. When FCG is fully integrated, it should help to grow and expand the profitability of Penson's strategically important futures business.
Under Penson GHCO's ownership, FCG will continue to provide its industry-leading technology products and services to its introducing brokers and other customers. Founders John D. Streich, President and CEO, and Michelle Streich, Executive Vice President, have signed three year contracts to continue with FCG in those roles. Mr. Streich is a former member of the Board of Directors of the National Futures Association (NFA) as well as the NFA Appeals Committee.
"We are pleased to have an industry leader like John Streich and the other members of FCG join the Penson team," said Philip A. Pendergraft, CEO of Penson Worldwide. "FCG, currently holding more than $70 million of customer segregated funds, had $12 million in revenues over the last 12 months, is profitable, and has a number of unique brands, strategies and technologies that will work well with our futures business."
Chris Hehmeyer, CEO of Penson GHCO, noted that "Penson GHCO, combined with FCG, will have more than $260 million in segregated funds. We intend to continue to grow our futures business, both organically and by additional acquisitions, where we have an excellent fit in products and people."