In a $606 million dollar cash and stock deal Thinkorswim has agreed to be bought out by TD Ameritrade. The move reiterates TD Ameritrade's strength in the competitive marketplace and is a step in the right direction for its overall growth strategy.
The big advantage for TD Ameritrade is the ability to offer Thinkorswim's stock simulator to their six million plus clients and anyone new who might be interested in joining. A great move.
Thinkorswim's focus is in options trading which is also a nice plus for TD Ameritrade:
Thinkorswim is among the fastest growing online brokerage firms and has unique trading and investor education capabilities, particularly for the fastest growing segment of the industry – options trading. Over the 12-month period ended Sept. 30, 2008, the company generated $380 million in revenue and $87 million in pre-tax income. It has approximately 87,000 funded retail brokerage accounts, each placing approximately 176 trades per year, more than $3 billion in client assets and more than 375,000 education graduates.
To offset the 28 million new shares of stock TD Ameritrade will be issuing to current Thinkorswim shareholders, TD Ameritrade is going to initiate a fresh stock buyback program. Total cash amount being payed out is $225 million.
As of this post TD Ameritrade (AMTD) is trading right around $13 a share and boasts a market cap of $7.78 Billion. Thinkorswim Group (SWIM) is trading at around $8.30.
Source:
TD Ameritrade to Acquire Thinkorswim
BusinessWire.com
January 8th, 7:30 AM EST
