|
Ameritrade buys NDB.com
|
 |
July 31, 2001: 12:17 p.m. ET
Deutsche Bank sells online brokerage unit of NDB for $154 million in stock
|
NEW YORK (CNNfn) - Ameritrade Holding Corp. agreed Tuesday to acquire the online brokerage unit of rival National Discount Brokers Group Inc., a subsidiary of Deutsche Bank AG, for $154 million in stock.
Ameritrade (AMTD: Research, Estimates) said the transaction, which should immediately add to the bottom line, would add $67 million in revenue to its fixed-cost structure, $6.3 billion in client assets, and 316,000 additional brokerage accounts with 9,000 additional trades per day. The deal would reduce the company's debt-to-equity ratio to 18 percent from 29 percent.
Terms of the purchase, which is expected to close in the fall, call for Omaha, Neb.-based Ameritrade to issue between 21 million and 32 million shares in the transaction.
News of a sale emerged last week with possible bidders including E*Trade Group Inc. (ET: down $0.03 to $6.40, Research, Estimates) as well as Ameritrade.
In October, Deutsche Bank AG, Europe's largest bank in terms of assets, purchased the rest of National Discount Brokers Group Inc. it didn't already own for slightly more than $1 billion. Deutsche Bank paid about $1.02 billion, or $49 per share cash, for NDB's 20.9 million shares outstanding. Jersey City, N.J.-based NDB is best known for its advertising campaign featuring a mallard duck and the slogan, "We put you under our wing."
The sale Tuesday to Ameritrade includes the online brokerage arm and not NDB's profitable market-making presence, NDB Capital Markets Corp., which generates nearly two-thirds of NDB's revenue, a spokesman said.
On completion of the deal, NDB will own between 10 percent and 14 percent of Ameritrade common stock.
"Last month we announced the largest reorganization in our company's history. This acquisition reflects our aggressive focus on growth and profitability," Ameritrade CEO Joe Moglia said.
Discount brokerages, particularly online firms, have been hit hard by the recent economic slowdown as clients' gains were wiped out in a volatile stock market, prompting many amateur investors to get out of the market or park their money on the sidelines.
Deutsche Bank advised NDB while Salmon Smith Barney served as financial advisor to Ameritrade. 
|
|
|
|
|
 |
|
