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The all-stock deal, announced Thursday, calls for FCStone shareholders to receive 0.2950 shares of International Assets common stock for each share they own. Based on International Assets' closing price Wednesday of $15.74, the deal values FCStone's shares at $4.64 each, or a total of $130 million.
Following the merger, FCStone shareholders will own 47.5 percent of the company and International Assets shareholders will own 52.5 percent. The companies said the share swap will create a company with a market capitalization of $260 million serving more than 10,000 customers.
The merged company will have 650 employees in 11 countries, combined assets of $2.3 billion and combined revenues of $411 million.
International Assets has offices in New York, London, Miami, Orlando, Buenos Aires, Montevideo, Dubai and Singapore. It provides financial services to the precious metals, foreign currency and international equities trading markets, according to the companies' news release. FCStone, which moved to Kansas City in 2007 from Des Moines, Iowa, helps clients manage commodity risks.
FCStone will continue to operate independently after the merger. FCStone president and chief executive Pete Anderson will continue as CEO of FCStone while serving as president and a director of the merged company. Sean O'Connor, the current CEO of International Assets, will be CEO of the merged company.
The deal is subject to shareholder approval.
FCStone stock closed Thursday at $4, down 15 cents, or 3.6 percent. International Assets dropped $1.81, or 11.5 percent, to $13.93.
FCStone earlier this year got rid of a problematic energy trading account that triggered more than $100 million in losses. News of the problem surfaced in November when the company said it had set aside $20 million to cover potential losses on the account. In late February, it said it would need to bump that amount to $80 million or possibly $100 million.
The cost to transfer the account off its own back boosted FCStone's final bad-debt provision to $110 million.
Its realized losses from the account total $54.4 million, or $1.95 a share, which will come in its second and third quarters.
To reach Dan Margolies, call 816-234-4481 or send e-mail to dmargolies@kcstar.com.
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