E*Trade Buys Harrisdirect for $700 million
E*Trade Financial Corp. is buying US-based online brokerage operations of Harrisdirect from BMO Financial Group in a cash-transaction valued at $700 million.
“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 E*Trade CEO Mitchell H. Caplan.
“We will continue to actively pursue opportunities that enable us to further build out our distinct business model,” added Caplan.
From the deal, E*Trade will gain about $32 billion in assets, $5 billion in cash, $1 billion in margin debt balances and approximately 15,000 trades per day.
This will all come through 430,000 active high-value customer accounts, with an average account balance of over $70,000. E*Trade has also obtained marketing rights to over 300,000 additional customer accounts.
“We look forward to integrating the best solutions from each company to deliver highly competitive, value-added products and services to our customers,” said E*Trade President and COO R. Jarrett Lilien.
“The addition of Harrisdirect’s world class customer service skills will strengthen our competitive position in the marketplace.”
E*Trade expects the transaction to deliver pre-tax operating synergies of about $186 million, which will be comprised of $114 million in expense synergies and $72 million in revenue synergies.