NEW YORK, Aug. 8 /PRNewswire-FirstCall/ -- E*TRADE FINANCIAL Corporation
(NYSE: ET) today announced it will acquire the US-based online brokerage
operations of Harrisdirect from BMO Financial Group (TSX, NYSE: BMO) for
$700 million in cash. The transaction is expected to deliver pre-tax
operating synergies of approximately $186 million, which will be comprised of
$114 million in expense synergies and $72 million in revenue synergies. After
completing integration, on a full-year run rate basis, the deal is expected to
generate $0.17 earnings per share in accretion. The Company expects to
achieve full-year run rate synergies nine months after close.
"With the acquisition of Harrisdirect, we take a strategic step in further
evolving our franchise. We accelerate our growth goals by extending our asset
gathering strategy and fully leveraging customer cash, order flow and
borrowing relationships across our integrated platform," said Mitchell H.
Caplan, Chief Executive Officer, E*TRADE FINANCIAL. "We will continue to
actively pursue opportunities that enable us to further build out our distinct
business model."
With the integration of approximately 430,000 active high-value customer
accounts, with an average account balance of over $70,000, E*TRADE FINANCIAL
will gain $32 billion in assets, $5 billion in cash, $1 billion in margin debt
balances and approximately 15,000 trades per day -- all of which can be
uniquely monetized by the retail and institutional components of E*TRADE
FINANCIAL's integrated business model. In addition, E*TRADE has obtained
marketing rights to over 300,000 additional customer accounts.
Upon the deal closing, E*TRADE FINANCIAL will have:
-- Approximately 130,000 daily average revenue trades (DARTs);
-- Over 4 million customer accounts;
-- Approximately $130 billion in customer assets;
-- Total customer cash and deposits of $24 billion;
-- Over $3.2 billion in average margin debt.
"We look forward to integrating the best solutions from each company to
deliver highly competitive, value-added products and services to our
customers," said R. Jarrett Lilien, President and Chief Operating Officer,
E*TRADE FINANCIAL. "The addition of Harrisdirect's world class customer
service skills will strengthen our competitive position in the marketplace."
"Harrisdirect clients have benefited from innovative solutions and
award-winning customer service that has distinguished the Harrisdirect brand.
Under the E*TRADE FINANCIAL banner, they will benefit from an expanded breadth
of product capabilities and product enhancements that E*TRADE will provide,
given its significant scale and market presence," said Tony Comper, President
and Chief Executive Officer, BMO Financial Group.
E*TRADE FINANCIAL's acquisition of Harrisdirect strengthens the franchise,
increases its customer base in the serious investor segment and expands its
opportunity to leverage a larger customer base across investing, cash and
credit solutions.
Investor Conference Call/Webcast
E*TRADE FINANCIAL will host a conference call for shareholders and
analysts this morning, August 8, 2005, at 8:30 a.m. EDT to discuss the
announcement. The conference call will be available to domestic participants
by dialing 877-434-1281 and 706-679-3933 for international participants. A
live audio webcast of this conference call will also be accessible at
https://investor.etrade.com/investors.cfm .
The call will be available by replay for 2 weeks from 8/8 to 8/22 at
domestic: 800-642-1687 and international: 706-645-9291 enter the conf. id
8493186#
About E*TRADE FINANCIAL
The E*TRADE FINANCIAL family of companies provide financial services
including trading, investing, banking and lending for retail and institutional
customers. Securities products and services are offered by E*TRADE Securities
LLC (Member NASD/SIPC). Bank and lending products and services are offered by
E*TRADE Bank, a Federal savings bank, Member FDIC, or its subsidiaries.
About BMO Financial Group
Established in 1817 as Bank of Montreal, BMO Financial Group is a highly
diversified North American financial services organization. With total assets
of $294 billion as at January 31, 2005, and more than 33,000 employees, BMO
provides a broad range of retail banking, wealth management and investment
banking products and solutions. BMO Financial Group serves clients across
Canada through its Canadian retail arm BMO Bank of Montreal and through BMO
Nesbitt Burns, one of Canada's leading full-service investment firms. In the
United States, BMO serves clients through Chicago-based Harris, an integrated
financial services organization that provides more than 1.5 million personal,
business, corporate and institutional clients with banking, lending,
investing, financial planning, trust administration, portfolio management,
family office and wealth transfer services.
Important Notices
E*TRADE FINANCIAL and the E*TRADE FINANCIAL logo are registered trademarks
or trademarks of E*TRADE FINANCIAL Corporation. The statements contained in
this news release that are forward-looking are based on current expectations
that are subject to a number of uncertainties and risks, and actual results
may differ materially. The uncertainties and risks include, but are not
limited to, changes in market activity, anticipated increases in the rate of
new customer acquisition, the conversion of new visitors to the site to
customers, the activity of customers and assets held at the institution,
seasonality, the development and enhancement of products and services,
competitive pressures (including price competition), system failures, economic
and political conditions, changes in consumer behavior and the introduction of
competing products having technological and/or other advantages. Further
information about these risks and uncertainties can be found in the
information included in the annual reports previously filed by E*TRADE Group,
Inc. or E*TRADE FINANCIAL Corporation with the SEC on Form 10-K (including
information under the caption "Risk Factors") and quarterly reports on Form
10-Q.
Contact: media, Pam Erickson, +1-617-296-6080, or
pam.erickson@etrade.com, or investor relations, Adam Townsend,
+1-703-236-8719, or adam.townsend@etrade.com, both of E*TRADE FINANCIAL
Corporation.
SOURCE E*TRADE FINANCIAL Corporation
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Related links:
https:
//investor.etrade.com/investors.cfm
Related links:
http://www.etrade.com
CONTACT:
media, Pam Erickson, +1-617-296-6080, or
pam.erickson@etrade.com, or investor relations, Adam Townsend,
+1-703-236-8719, or adam.townsend@etrade.com, both of E*TRADE
FINANCIAL Corporation
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