E*TRADE Acquires Web Street for $45 Million in Stock
Transaction Includes Web Street's Physical Locations, Which Will Be Converted
into E*TRADE Centers in Four Cities
MENLO PARK, Calif., May 21 /PRNewswire/ -- E*TRADE Group, Inc. (NYSE: ET)
today announced that it will acquire Web Street, Inc. (Nasdaq: WEBS), parent
company of Web Street Securities, an online brokerage firm. The purchase
includes Web Street Securities' 34,000 active accounts, including
6,300 accounts held by German residents, and its physical locations in
San Francisco, Boston, Beverly Hills and Denver, which will be converted into
E*TRADE financial superstores, called E*TRADE Centers.
The transaction, valued at approximately $45 million in stock, is expected
to add incremental annual revenues of approximately $25 million to E*TRADE's
results. Of the $45 million purchase price, $25 million represents the
acquisition of the brokerage business and accounts. The remaining $20 million
applies to the acquisition of the four physical locations, cash on hand and
net operating losses expected to result in future tax savings. The acquisition
is expected to be accretive to both revenue and earnings immediately upon
closing, which is subject to regulatory and other approvals.
"Today's acquisition of Web Street further demonstrates the strength of
the E*TRADE brand and its agility to seize opportunities that make strategic
sense for its shareowners, customers and Associates," said Christos M.
Cotsakos, chairman of the board and chief executive officer, E*TRADE Group,
Inc. "As we continue to expand our diverse revenue streams and increase our
worldwide customer base, E*TRADE further strengthens its leadership position."
"We believe that Web Street's customers will realize tremendous benefit
from this synergistic combination of two leading innovators in the online
financial services business," said Joseph Fox, co-chairman & co-chief
executive officer of Web Street. "Web Street and E*TRADE share a common vision
of providing global brokerage services to our valued customers through
face-to-face, as well as electronic channels. Web Street's brokerage customers
will benefit from E*TRADE's impressive array of banking and investing
products, while still receiving a high level of customer service that they
have come to expect."
About E*TRADE
E*TRADE is a global leader in online personal financial services, offering
value-added investing, banking and research features, premium customer service
and a redundant, proprietary Stateless Architecture(R) infrastructure. In
addition to the U.S., E*TRADE presently serves customers in Australia, Canada,
Denmark, Hong Kong, Korea, Japan, Norway, South Africa, Sweden, and the U.K.
through branded web sites. E*TRADE Group, Inc., has offices in Northern
California, New York City and in other major business centers in the U.S. and
worldwide.
About Web Street
Web Street Securities serves the needs of individual investors, primarily
in the United States and Europe, by delivering streaming, real-time quotes,
quick trade confirmations and real-time portfolio updates, along with superior
24-hour customer service. Web Street Securities is headquartered in Chicago,
with Financial Services Centers in Boston, Beverly Hills, Denver, and coming
soon to San Francisco. For more information, visit www.webstreet.com or call
800-WEBTRADE (800-932-8723) or at 312-775-6700.
A registration statement relating to the E*TRADE common stock to be issued
in the transaction will be filed with the Securities and Exchange Commission
as soon as practicable. When filed, copies of this document may be obtained
free of charge on the sec website (www.sec.gov). This and other related
documents should be carefully reviewed because they will contain important
information.
Important Notice
E*TRADE, the E*TRADE logo and Stateless Architecture are registered
trademarks of E*TRADE Securities, Inc. 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,
failure of the transaction to close due to the failure to obtain regulatory or
other approvals, failure of the Web Street stockholders to approve the merger,
if that approval is necessary, the risk that the Web Street business will not
be integrated successfully and unanticipated costs of such integration,
changes in market activity, anticipated increases in the rate of new customer
acquisition, seasonality, the development of new products and services, the
enhancement of existing 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. For a detailed
discussion of these and other cautionary statements, please refer to the
registration statement to be filed by E*TRADE with the SEC relating to this
transaction. Further information about these risks and uncertainties can be
found in the companies' respective Forms 10K and 10Q filed with the SEC.
System response and account access time may vary due to market conditions,
trading volume, system performance and other factors.
CONTACT:
E*TRADE Media Contact
Heather Fondo
E*TRADE Group, Inc.
650-331-5774
hfondo@etrade.com
E*TRADE Investor Relations Contact
Erica Gessert
E*TRADE Group, Inc.
650-331-5893
egessert@etrade.com
At Web Street
Joseph Fox
Co-Chief Executive Officer
847-444-4700
Web Street Investor Relations Contact
Beth Saunders
312-587-0780, Ext. 281
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SOURCE E*TRADE Group, Inc.
-0- 05/21/2001
/CONTACT: media, Heather Fondo, 650-331-5774, or hfondo@etrade.com, or
investor, Erica Gessert, 650-331-5893, or egessert@etrade.com, both of E*TRADE
Group, Inc.; or Joseph Fox, Co-Chief Executive Officer of Web Street, Inc.,
847-444-4700; or investors, Beth Saunders, 312-587-0780, ext. 281, for Web
Street, Inc./ |
