E*TRADE (ETFC) announced today that it has entered into a definitive agreement to acquire Aperture New Holdings, Inc., the ultimate parent of OptionsHouse, for $725 million in cash. This transaction will boost E*TRADE’s derivatives capabilities and expand the customer profile.
E*TRADE plans to finance the transaction through the issuance of up to $400 million of non-cumulative perpetual preferred stock, with the balance to be paid in cash. The transaction is expected to close in the fourth quarter of 2016.
OptionsHouse had previously merged with tradeMONSTER in 2014. OptionsHouse is headquartered in Chicago and currently has 154,000 customer accounts and $3.6 billion in customer assets, including $1.4 billion in cash. OptionsHouse executed 27,000 Daily Average Revenue Trades (DARTs) for the 12 months ending June 30. Out of those 27,000 DARTs, 63 percent were options trades.
Paul Idzik, E*TRADE CEO, said, “We believe options are an important component of an investor’s arsenal, and this deal will intensify our derivatives firepower.” Idzik also noted that this was the first acquisition E*TRADE has made in a long time.
“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, CEO of Aperture Group, LLC.
E*TRADE expects this deal to be relatively neutral to earnings in 2017 and accretive in 2018.
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Click here for the full press release on this acquisition.