Transaction To Be Accretive to Earnings
Acquisition Demonstrates Management Team's Focus on Growth and Profitability
OMAHA, NE -- Tuesday, July 31, 2001 -- Ameritrade Holding Corp. (Nasdaq:
AMTD) today announced a definitive agreement to acquire National Discount
Brokers Corporation (NDB.com), an indirect subsidiary of Deutsche Bank
AG, for approximately $154 million in common stock. NDB.com is consistently
one of the highest rated online brokers by leading financial publications.
The transaction is expected to:
· Be immediately accretive to earnings and cash flow upon closing
· Add approximately:
· $67 million in incremental revenue to Ameritrade's fixed cost structure
· 316,000 additional accounts, a 20 percent increase
· $300 million in margin balances, a 23 percent increase
· $6.3 billion in client assets, a 24 percent increase
· 9,000 trades per day, an 8 percent increase
· Reduce debt-to-equity ratio from 29 to 18 percent
· Add 401(k) accounts and an employee stock option business to the new
Institutional Client Division
"Last month, we announced the largest reorganization in our company's
history. This acquisition reflects our aggressive focus on growth and
profitability," said Joe Moglia, chief executive officer of Ameritrade
Holding Corporation. "By maximizing our operating leverage, we expect
to increase our commission revenue, net interest revenue and operating
margins, and move toward our goal of being a market leader in every
client segment we serve. Our new clients will benefit from our segmentation
strategy, which will provide greater choice and customized products
"NDB.com's clients are winners in this transaction. They will benefit
from the value, service and ease-of-use that we have always admired
about Ameritrade," commented Mayo Shattuck, CEO of Deutsche Bank's Private
Client and Asset Management Division in the Americas. "Deutsche Bank
will continue to focus on our strategy to further build on the strong
position of NDB Capital Markets Corp."
About the Transaction
The transaction is anticipated to close in the fall, subject to customary
regulatory approvals. 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,
Inc. or its designated affiliate will own between 10 percent and 14
percent of Ameritrade common stock. Ameritrade will file, shortly after
closing, a registration statement with respect to the shares it issues.
The Federal tax treatment of the transaction (with a joint election
under Section 338(h) (10) of the Internal Revenue Code) is expected
to provide significant financial benefits to Ameritrade. Upon the completion
of the transition period after closing, Ameritrade plans to conduct
all operations in its existing facilities across the U.S.
Ameritrade will update its current projections in the Investor Relations
"Outlook" section of its corporate website located at www.amtd.com after
the acquisition is completed.
About Ameritrade Holding Corporation
Ameritrade Holding Corporation (www.amtd.com) is a pioneer in the online
brokerage industry with a 26-year history of providing clients a self-directed
approach to investment services. The award-winning Company, through
its Private Client and Institutional Client divisions, provides tiered
levels of brokerage products and services tailored to meet the varying
investing, trading and execution needs of self-directed individual investors,
financial institutions and corporations.
NDB.com, formerly known as National Discount Brokers Corp., is the online
brokerage business of National Discount Brokers Group, an indirect subsidiary
of Deutsche Bank AG. For the past three years, NDB.com has received
Barron's highest overall rating of four stars and also been ranked #1
in Trade Execution Process. NDB.com currently services approximately
316,000 customer accounts, holding more than $6.3 billion in assets.
Following the transaction, National Discount Brokers Group will retain
its institutional market making business which, along with NDB.com,
was purchased by Deutsche Bank AG in 2000.
This document contains forward-looking statements regarding future
events or the future performance of Ameritrade. Various factors could
cause actual results to differ materially from those anticipated. Readers
of this document are advised to check the documents filed by Ameritrade
with the Securities & Exchange Commission, including Ameritrade's
Form 10-K and 10-Q for descriptions of risks and uncertainties related
to forward-looking statements that could cause actual results to differ
materially from those described in the forward-looking statements.