E*TRADE Financial Corporation (NASDAQ: ETFC) reached a definitive agreement to buy Aperture New Holdings, Inc.,
OptionsHouse's parent company, for $725 million in cash. The company expects the transaction to boost its derivatives capabilities
while expanding its customer profile due to OptionsHouse's highly active, derivative-centric traders.
E*TRADE said it plans to fund the transaction through the issue of a maximum of $400 million of non-cumulative perpetual
preferred stock and the balance would be paid in cash. The company expects transaction to close in the fourth quarter of the
current year, subject to customary closing conditions and regulatory approvals.
The company sees the transaction to be relatively neutral to its earnings next year and accretive in the follow year, i.e. 2018,
when the company would gain full run-rate synergies of approximately $65 million.
E*TRADE CEO, Paul Idzik, commented, "Amidst a steady drumbeat of significant steps to enhance the value of E*TRADE for our
customers and our owners, we are pleased to make this move to deliver greatly enriched options capabilities, while capitalizing on
our scale with the addition of an active customer base."
He added, "This is the first acquisition E*TRADE has made in a great while, underscoring our disciplined approach, and
commitment to deliver on our growth plans. We believe options are an important component of an investor's arsenal, and this deal
will intensify our derivatives firepower. Further, we could not be more excited to show OptionsHouse customers all we have to
offer, including deep research and education, long-term investing tools, and a best-in-class mobile experience."
OptionsHouse has 154,000 customer accounts with $3.6 billion in customer assets. This included $1.4 billion in cash. The Company
claimed that it executed 27,000 Daily Average Revenue Trades for the 12 months ended June 30. Incidentally, 63 percent of them were
in options. Its revenues were $104 million for the last 12 months.
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