Acquisitions

3 Months Ended

Dec. 31, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions

Acquisitions

Cotton Distributors Inc.

On October 31, 2022, the Company’s wholly owned subsidiary, StoneX Netherlands B.V., acquired CDI-Societe Cotonniere De Distribution S.A (“CDI”), based in Switzerland. CDI operates a global cotton merchant business with clients and producers in Brazil and West Africa as well as buyers throughout Asia. The purchase price is approximately $42.7 million, which is based on CDI’s estimated acquisition date tangible book value as defined by the terms of the purchase agreement and based on Swiss accounting practices, and an earn-out payment due to the seller. The earn-out value is determined by CDI’s performance with respect to certain contracts entered into before the acquisition date and settling after the closing date.

During the three months ended December 31, 2022, CDI contributed $14.0 million of Net operating revenue and $9.1 million of Net income.

The measurement period for the CDI acquisition remains open as the Company finalizes certain valuation calculations related to intangible assets, net tangible asset value adjustments, the fair values of forward contracts and other derivatives, as well as the earn-out due to the seller. The gain on acquisition was principally due to the fair value of commodity forward purchases and sales contracts and fair value of identified intangible assets acquired exceeding the consideration paid for these assets.

(in millions)	Fair Value
Cash and cash equivalents	$	8.2
Deposits with and receivables from broker-dealers, clearing organizations, and counterparties	7.7
Receivables from clients, net	51.9
Financial instruments owned, at fair value	45.7
Deferred income taxes, net	(3.3)
Property and equipment, net	0.1
Physical commodities inventory, net	22.5
Other assets	6.7
Total fair value of tangible assets acquired	139.5
Accounts payable and other accrued liabilities	40.0
Financial instruments sold, not yet purchased, at fair value	28.3
Payables to lenders under loans	10.1
Payable to broker-dealers, clearing organizations, and counterparties	0.4
Payable to clients	2.6
Income taxes payable	0.8
Total fair value of tangible liabilities assumed	82.2
Fair value of tangible net assets acquired	$	57.3
Identifiable intangible assets acquired
Client relationships	$	4.7
Supplier relationships	3.7
Trade name	0.4
Non-compete	0.1
Total fair value of intangible assets acquired	8.9
Fair value of identifiable net assets acquired	66.2
Total merger consideration	42.7
Gain on acquisition	$	23.5

Subsequent Acquisition

Incomm S.A.S..

On February 3, 2023, the Company’s subsidiary StoneX Commodity Solutions LLC executed a sale and purchase agreement to acquire all of the outstanding shares of Incomm S.A.S. (“Incomm”), a company duly incorporated and in existence according with the laws of Colombia. This transaction was effective on the closing date of February 3, 2023. Incomm was established to support the import of grain and feed products for Colombian clients, and is a proven resource in management of customs clearing, inventory management at destination ports and providing non-recourse trade finance for destination buyers via local Colombian banks.

The purchase price consists of $0.2 million of cash consideration and also includes a contingent earn-out with annual payments over the four years following the acquisition. The contingent earn-out payments are variable in nature and equal to a percentage of the acquired business line’s pre-tax profits, as defined in the purchase agreement. The business activities of Incomm will be assigned to the Company’s Commercial reportable segment.