Online brokerage Ameritrade has entered a definitive agreement to acquire Deutsche Bank's US brokerage subsidiary, National Discount Brokers Corporation, for approximately $154 million in common stock.
Depending on the market price of Ameritrade common stock prior to the closing - and subject to a collar - the number of shares to be issued will be between approximately 21 million to 32 million.
Upon completion of the transaction, National Discount Brokers Group, or its designated affiliate, will own between 10 per cent and 14 per cent of Ameritrade common stock.
The transaction is expected to be accretive to Ameritrade's earnings and cash flow upon closing. The company predicts $67 million in incremental revenue to Ameritrade's fixed cost structure and 316,000 additional accounts, representing a 20 per cent increase.
The transaction is anticipated to close in the autumn, subject to customary regulatory approvals.