Meaningfully bolsters derivatives capabilities
by bringing on board the industry’s #1(1) options platform
Adds scale with the addition of OptionsHouse's
highly active traders
E*TRADE Financial Corporation (NASDAQ:ETFC) today announced it
has entered into a definitive agreement to acquire Aperture New
Holdings, Inc., the ultimate parent company of OptionsHouse, for
$725 million in cash. The transaction will boost E*TRADE’s
derivatives capabilities while expanding its customer profile with
the addition of OptionsHouse’s highly active, derivative-centric
traders. The Company will host a conference call today at 8:30 a.m.
ET to discuss the transaction (details are below).
E*TRADE intends to finance the transaction through the issuance
of up to $400 million of non-cumulative perpetual preferred stock,
with the balance paid in cash. The transaction is expected to close
in the fourth quarter of 2016, subject to customary closing
conditions and regulatory approvals.
“Today’s announcement is momentous. 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,” said Paul Idzik, Chief
Executive Officer of E*TRADE Financial. “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.”
“This transaction provides OptionsHouse customers with an
expanded breadth of offerings, while they continue to enjoy the
same tools, platform, value, and quality services they have come to
expect,” said Michael Curcio, Chief Executive Officer of Aperture
Group, LLC. “E*TRADE has a fantastic array of products and
services, grounded in a steadfast focus on the customer. Bringing
OptionsHouse’s best-in-class derivatives platform within the
E*TRADE family will mean our customers can do more under one roof.
My leadership team and I look forward to shepherding a smooth
transition for our customers and colleagues alike.”
OptionsHouse, which merged with tradeMONSTER in 2014, is an
indirect subsidiary of Aperture New Holdings, Inc., a General
Atlantic company. OptionsHouse is headquartered in Chicago and
currently has 154,000 customer accounts with $3.6 billion in
customer assets, including $1.4 billion in cash. The Company
executed 27,000 Daily Average Revenue Trades for the twelve months
ended June 30, 2016, of which 63 percent were in options. Revenues
for the last twelve months were $104 million.
E*TRADE expects the transaction to be relatively neutral to
earnings in 2017 and accretive in 2018, when full run-rate
synergies of approximately $65 million annually are expected.
“From a capital utilization perspective, this transaction is
incredibly attractive,” said Mike Pizzi, Chief Financial Officer of
E*TRADE Financial. “Beyond creating compelling long-term returns
through expansion and synergies, the introduction of preferred
equity optimizes our capital structure and enhances flexibility.
Importantly, it supports our consolidated Tier 1 leverage ratio to
remain above target, while creating flexibility to continue
marching forward on other capital actions, including share
repurchases and balance sheet growth.”
E*TRADE was advised by Credit Suisse and Skadden, Arps, Slate,
Meagher & Flom. Aperture was advised by Evercore and Paul,
Weiss, Rifkind, Wharton & Garrison. Jefferies was also a
financial advisor to Aperture.
Investor conference call / Webcast
The Company will host a conference call to discuss the
transaction at 8:30 a.m. ET today. This call will be available to
domestic participants by dialing 888-223-5127, while international
participants should dial +1 303-223-4368. A live webcast will also
be available on about.etrade.com.
About E*TRADE Financial
E*TRADE Financial and its subsidiaries provide financial
services including online brokerage and related banking products
and services to retail investors. Securities products and services
are offered by E*TRADE Securities LLC (Member FINRA/SIPC). Bank
products and services are offered by E*TRADE Bank, a Federal
savings bank, Member FDIC, or its subsidiaries. More information is
available at www.etrade.com.
About Aperture New Holdings, Inc.
OptionsHouse operates under the holding company Aperture New
Holdings, Inc. OptionsHouse (www.optionshouse.com) is an
online broker and value leader dedicated to active traders, rated
“Best for Options Traders” by Barron’s1. OptionsHouse offers
advanced trading technology, a full-suite of investment products
including equities and futures, and first class customer service to
all online traders. Additionally, OptionsHouse offers a robust
five-star rated mobile app available on all major mobile platforms
and devices. All securities and investments are offered by
OptionsHouse. Member FINRA/SIPC/NFA.
(1) Based on ratings of OptionsHouse for Barron's annual ranking
of the Best Online Brokers, 3/19/16, based on Trading Experience
and Technology (4.4 stars), Usability (4.6 stars), Mobile (5.0
stars), Range of Offerings (3.7 stars), Research Amenities (4.8
stars), Portfolio Analysis & Reports (4.7 stars), Customer
Service, Education and Security (4.6 stars), and Costs (2.9 stars).
OptionsHouse overall received 4.5 out of 5 stars.
Important Notices
E*TRADE Financial, E*TRADE, and the E*TRADE logo are trademarks
or registered trademarks of E*TRADE Financial Corporation.
ETFC-G
Forward looking statements
The statements contained in this news release that are forward
looking, including statements regarding the proposed transaction
between E*TRADE and Aperture Holdings, L.P. are "forward-looking
statements" within the meaning of the safe harbor provisions of the
U.S. Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, but are not limited to,
statements regarding the benefits and timing of the proposed
transaction, such as areas of potential synergies from the proposed
transaction and impact of those potential synergies on E*TRADE’s
financial and operating results, the companies' products, customers
and markets, E*TRADE's anticipated capital structure and future
capital actions, the availability and potential sources of
financing for the transaction and the impact and regulatory
implications of a potential preferred equity financing. These
statements are subject to a number of uncertainties and risks, and
actual results may differ materially from those indicated in the
forward-looking statements. The uncertainties and risks include the
following, among others: closing of the transaction may not occur
or may be delayed; expected synergies and other financial benefits
of the transaction may not be realized; integration of OptionsHouse
post-closing may not occur as anticipated; regulatory risks
associated with the transaction; unanticipated restructuring costs
may be incurred or undisclosed liabilities assumed; attempts to
retain key personnel and customers may not succeed; financing for
the transaction may not be available on acceptable terms; and there
may be negative changes in general economic conditions in the
regions or the industries in which the businesses operate. Further
information about these risks and uncertainties can be found in the
annual, quarterly, and current reports on Form 10-K, Form 10-Q, and
Form 8-K E*TRADE Financial Corporation files with the Securities
and Exchange Commission (including information in these reports
under the caption "Risk Factors"). Any forward-looking statement
included in this release speaks only as of the date of this
communication; E*TRADE and Aperture disclaim any obligation to
update any information, except as required by law.
© 2016 E*TRADE Financial Corporation. All rights reserved.
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version on businesswire.com: http://www.businesswire.com/news/home/20160725005540/en/
E*TRADE Media
RelationsThayer Fox,
646-521-4418thayer.fox@etrade.comorE*TRADE
Investor RelationsBrett Goodman,
646-521-4406brett.goodman@etrade.com
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