[01-20-00 07:23 PM ET] (OMGA) finance.yahoo.com AND (LINE) finance.yahoo.com AGREE TO $300 MILLION MERGER...
Omega Research and OnlineTrading.com Agree to $300 Million Merger to Create World's First Institutional Level Trading Platform for the Active Online Trader
Combination Heralds Next Phase of Online Trading Revolution
Miami/Boca Raton, January 20, 2000 ? "Omega Research, Inc. (Nasdaq: OMGA), a leading provider of real-time analytical tools for active traders, and OnlineTradinginc.com Corp. (Nasdaq: LINE), a leading direct ECN access online broker for active traders, today announced a definitive agreement to merge the two companies in an all-stock combination valued at approximately $300 million. The combination will create the world's first institutional level trading platform for the active trader.
The strategic combination of these companies will create a seamlessly-integrated trading platform that will for the first time, deliver a complete solution to the active trader: powerful decision-support analytics, streaming real-time market quotes and news, and direct ECN online order execution.
The agreement calls for Omega Research shareholders to receive one share of common stock of a newly-formed holding company, Online Trading Group, Inc., for each share of Omega Research currently held. The exchange ratio for OnlineTrading.com shareholders will range from 1.3817 to 1.7172 shares of Online Trading Group common stock for each share of OnlineTrading.com. The exchange ratio for OnlineTrading.com decreases to the extent, if any, that the average last sale price of Omega Research stock for the 10-day trading period ending on the third trading day prior to the closing of the merger has appreciated. The 1.3817 exchange ratio is reached if the average last sale price of Omega Research common stock has appreciated to $8.01 per share. At the 1.7172 exchange ratio, Online Trading Group will be owned approximately 57% by Omega Research shareholders and 43% by OnlineTrading.com shareholders. At the 1.3817 exchange ratio, Online Trading Group will be owned 62% by Omega Research shareholders and 38% by OnlineTrading.com shareholders. Omega Research currently has 26.4 million shares outstanding on a fully-diluted basis, and OnlineTrading.com currently has 11.7 million shares outstanding on a fully-diluted basis. The merger will be accounted for as a pooling-of-interests and constitute a tax-free reorganization.
Bill Cruz, co-chairman of the board and co-chief executive officer of Omega Research, said, "This strategic merger will position us at the forefront of the online trading revolution. The online brokerage business is expanding at an accelerating pace, but what most observers lose sight of is that about 20 percent of online traders represent about 80 percent of online trading volume. By integrating Omega Research's best-of-breed analytics technology with OnlineTrading.com's state-of-the-art order execution, we believe that we will be offering a unique and compelling solution to that 20 percent."
Steven zum Tobel, president of OnlineTrading.com, said, "With over 40,000 users world-wide, Omega Research's TradeStation has clearly established itself as the industry-leading decision support tool for the active trader. Its ability to empower a user to design, historically test and automate custom trading strategies is unmatched. Seamlessly integrating this powerful tool with OnlineTrading.com's order-execution technology will, we believe, create a complete solution that will appeal not only to the tens of thousands of TradeStation users, but to all active online traders who are searching for a better solution."
Closing of the transaction, which is currently expected to occur in May, is subject to customary closing conditions, as well as NASD approval of a change of control of OnlineTrading.com, a licensed broker-dealer, and the filing with the SEC and effectiveness of a registration statement for Online Trading Group's shares and the listing of such shares on The Nasdaq National Market. While the merger is also subject to approval by shareholders of both companies, managements of the two companies each represent more than the requisite majority of shares required to approve the merger.
Online Trading Group Management
While the individual businesses will continue to be run by their pre-merger management teams, the companies disclosed the proposed structure of Online Trading Group, the new holding company formed to facilitate the merger. Omega Research executives William R. Cruz and Ralph L. Cruz will serve as co-chairmen and co-chief executive officers; Salomon Sredni has been named president and chief operating officer; Marc J. Stone will be the company's vice president, general counsel and secretary; Gregg F. Stewart will serve as chief financial officer and vice president of finance and treasurer; and Janette Perez has been named vice president of advertising and sales. OnlineTrading.com executives Farshid Tafazzoli and Steven zum Tobel will be named vice presidents of Online Trading Group. Andrew A. Allen, Chairman and CEO of OnlineTrading.com, has announced that upon completion of the merger he has decided to leave the management team to devote time to his family. The board of directors of Online Trading Group will initially consist of eight members: Five members, including two independent directors, designated by Omega Research; and three members, including one independent director, designated by OnlineTrading.com.
About OnlineTrading.com
OnlineTrading.com offers real-time direct ECN trading over the Internet and through traditional brokers. The firm caters to a client base of active traders composed of high net worth individuals and small to mid-size financial institutions. It has approximately $750 million in customer assets. The firm's customers can choose the exchange, market maker or ECN that executes their trade. OnlineTrading.com's policy of not accepting payment for order flow helps ensure that customers receive the best available execution. The company maintains a clearing and custodial relationship with Bear Stearns..." Source: 01/20/00 Omega Research Company Press Release omegaresearch.com
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