GAIN Capital to Acquire GFT; Announces Preliminary First Quarter Results

   GAIN Capital to Acquire GFT; Announces Preliminary First Quarter Results

  PR Newswire

  BEDMINSTER, New Jersey, April 25, 2013

- Transformative acquisition provides significant scale along with revenue and
product diversification

- Combined 2013 revenue run-rate of $329 million and pro forma EBITDA run-rate
of $77 million based on Q1 2013 results

- Pro forma client assets of approximately $650 million and funded accounts of
139,710 as of March 31, 2013

- Estimated first year operating synergies of $35-$45 million

- Accretive in the first full quarter following closing

BEDMINSTER, New Jersey, April 25, 2013 /PRNewswire/ --

GAIN Capital Preliminary First Quarter 2013 Results:

  *Revenues increased 50% year-over year, to $49.8 million
  *EBITDA of $7.5 million, up from $1.3 million; 15% EBITDA margin
  *Net income of $4.3 million, or $0.11 per diluted share
  *Client assets reached $456.9 million; Funded accounts increased 36% to
    100,020

GAIN Capital Holdings, Inc. (NYSE: GCAP, "the Company") today announced that
it has signed a definitive agreement to acquire Global Futures & Forex, LTD
(GFT), a global provider of retail forex and derivatives trading with offices
in London, Singapore, Tokyo, Sydney and Grand Rapids, Michigan. The purchase
price is approximately $107.8 million which, including $80 million of GFT cash
at closing, results in a net purchase price of $27.8 million. The purchase
price will be paid with $40 million in cash, a five-year $40 million seller
note and the issuance of approximately 4.9 million shares of GAIN common
stock. Both companies will initially retain their separate brand identities,
while benefitting from significant synergies and capabilities across their
complementary businesses. The transaction is expected to close in the third
quarter of 2013, subject to regulatory approvals and customary closing
conditions.

Founded in 1997, GFT offers forex, CFDs, spread betting, binaries and FX
options primarily through its proprietary, award-winning Dealbook® platform.
GFT has built an extensive network of partners throughout the world that
accounted for over 75% of GFT's retail trading volume in 2012. This strong
partner business complements GAIN's market-leading retail brand, FOREX.com,
and the combined company will source approximately 52% of its retail volume
from partners, with the remaining 48% coming from direct retail clients. In
addition, GFT's growing Sales Trader business, which accounted for
approximately 40% of GFT's total trading volume in 2012, fits well with GAIN's
institutional execution desk, providing a substantial opportunity to expand
the Company's institutional business.

The transaction is expected to be accretive in the first full quarter after
closing, and first year operating synergies are estimated at $35-$45 million.
The combined company will have pro forma client assets of approximately $650
million, a 2013 revenue run-rate of $329 million, based on first quarter 2013
revenues of $49.8 million and $32.5 million for GAIN and GFT, respectively,
and a 2013 pro forma EBITDA run-rate of $77 million, based on first quarter
2013 EBITDA of $7.5 million and $1.8 million for GAIN and GFT, respectively,
and assuming the mid-point of first year operating synergies achieved.

"Following our successful acquisition of GFT's U.S. business in December of
2012, we recognized that combining GAIN's operations with GFT was a
significant opportunity to grow our business across the spectrum of retail and
institutional products. The combined company will have a deeper global
footprint, a robust offering of more than 12,500 financial products, and
industry-leading trading platforms and tools. Our larger scale will also
enhance GAIN's ability to take advantage of improved market conditions, while
providing greater resilience at times of weak volatility," said Glenn Stevens,
CEO of GAIN Capital. "This combination builds upon GAIN's strong track record
as a successful industry consolidator and creates an even more robust platform
for future consolidation and growth."

"This transaction is a natural fit, as it combines two highly complementary
businesses to create a new leading player in the industry," said Gary L.
Tilkin, CEO and founder of GFT. "Consistent with our history of partnering
with respected market leaders, GAIN has a strong management team and an
excellent reputation in the industry. I am enthusiastic about this opportunity
to leverage our combined strengths to unlock significant value for both
customers and stockholders."

Upon the completion of the acquisition, Mr. Tilkin will hold a 12% equity
interest in GAIN and will become a member of GAIN's Board of Directors.

GFT clients should expect no impact to their accounts or how they trade. All
clients will receive more detailed information about what they can expect from
the combined company after the acquisition is completed.

Raymond James & Associates, Inc. provided a fairness opinion regarding the
acquisition of GFT.

Preliminary First Quarter Results

GAIN Capital reported that its net revenues for the first quarter ended March
31, 2013 reached $49.8 million, an increase of 50% over last year's first
quarter. EBITDA for the period was $7.5 million, up from $1.3 million in the
first quarter 2012, and net income was $4.3 million, or $0.11 per diluted
share, compared to a loss of $1.3 million, or $0.04 per diluted share, in the
first quarter of 2012. GAIN's client assets increased to $456.9 million, up
from $446.3 as of December 31, 2012. Full financial results for the period, as
well as operating metrics for the month of April will be released after the
close of the market on Tuesday May 7, 2013.

Conference Call

GAIN Capital will host a conference call to discuss this announcement
Thursday, April 25, 2013, at 8:00am ET. Participants may access the live call
by dialing +1.877.317.6789 (U.S. domestic), or +1.412.858.4600
(international).

A live audio webcast of the call and presentation discussing this announcement
will be available at: http://services.choruscall.eu/links/mbs130424.html . An
online archive of the webcast will be available for one month.

An audio replay will be made available for one month starting approximately
two hours after the call by dialing +1.877.344.7529 in the U.S. or
+1.412.317.0088 from abroad, and entering passcode 10028256#.

About GAIN Capital

GAIN Capital Holdings, Inc. (NYSE: GCAP) is a global provider of online
trading services. GAIN's innovative trading technology provides market access
and highly automated trade execution services across multiple asset classes,
including foreign exchange (forex or FX), contracts for difference (CFDs) and
exchange-based products, to a diverse client base of retail and institutional
investors.

Through our retail brand, FOREX.com , we provide retail traders around the
world with access to a variety of global OTC financial markets, including
forex, precious metals and CFDs on commodities and indices. GAIN Capital also
operates GTX, a fully independent FX ECN for hedge funds and institutions;
Open eCry (OEC), an innovative online futures broker; and GAIN Securities,
Inc. (member FINRA/SIPC) a licensed U.S. broker-dealer.

GAIN Capital is headquartered in Bedminster, New Jersey, with a global
presence across North America, Europe and the Asia Pacific regions. For
further company information, visit www.gaincapital.com

Reconciliation of GAAP Net Income to Adjusted EBITDA

EBITDA is a non-GAAP financial measure that represents our historical and pro
forma earnings before interest, taxes, depreciation, amortization and
non-recurring expenses. This non-GAAP financial measure has certain
limitations, including that it does not have a standardized meaning and,
therefore, our definition may be different from similar non-GAAP financial
measures used by other companies and/or analysts. Thus, it may be more
difficult to compare our financial performance to that of other companies. We
believe our reporting of EBITDA assists investors in evaluating our historical
and expected operating performance. However, because EBITDA is not a measure
of financial performance calculated in accordance with GAAP, such measure
should be considered in addition to, but not as a substitute for, other
measures of our financial performance reported in accordance with GAAP, such
as net income.

Reconciliation of GAAP Net Income to EBITDA and EBITDA Margin Reconciliation
                                 In millions
                                 (unaudited)
                                                        3 Months Ended March
                              FYE December 31, 2012           31, 2013
                                Gain           GFT        Gain        GFT
                                              $        $        $   
Net revenue                  $   151.4       97.8        49.8       32.5
Interest expense                      0.4           -         0.1           -
Net revenue (ex. interest                     $        $        $   
expense)                     $   151.8       97.8        49.9       32.5
                                              $        $        $   
Net income / (loss)          $    2.6      (32.7)        4.3      (2.4)
 Depreciation and
amortization                          4.9         9.5         1.6         2.2
 Purchased intangible
amortization                          4.1           -         0.6           -
 Interest expense                   0.4           -         0.1           -
 Restructuring(1)                   0.6           -           -           -
 Income tax expense /
(benefit)                           (1.5)       (0.2)         0.9         2.0
                                              $        $      $    
EBITDA                       $    11.1      (23.4)        7.5         1.8
EBITDA Margin %(2)                     7%          NM         15%          6%
(1) Non-recurring expenses related to cost savings effected in 2Q
2012
(2) EBITDA Margin calculated as EBITDA / Net revenue (ex. Interest
expense)

Website: http://www.gaincapital.com
Contact: Media Contact: Chris Mittendorf, Edelman for GAIN Capital, +1
212.704.8134, pr@gaincapital.com; or Investor Relations Contact: Hugh Collins
and Lynn Morgen, MBS Value Partners, +1 212.750.5800, gain@mbsvalue.com
 
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