E*TRADE To Buy Web Street
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Increasing its footprint as both an online investment site and a face-to-face brick and mortar store, E*TRADE (NYSE: ET) Monday said it will acquire Web Street (Nasdaq: WEBS) for approximately $45 million in stock.
Chicago-based Web Street is the parent company of Web Street Securities, an online brokerage firm.
The sale 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.
As soon as the deal is approved by the government and investors, E*TRADE says it will spend $25 million on Web Street's brokerage business and accounts and $20 million on the four physical locations.
"Web Street and E*TRADE share a common vision," says Web Street co-chairman and co-CEO Joseph Fox. "We believe that Web Street's customers will realize tremendous benefit from this synergistic combination of two leading innovators."
The deal marks yet another migration of Menlo Park-based E*TRADE's financial services from the online world. In April, the company opened a "super-store" in midtown Manhattan and penned a deal with Target Stores (NYSE: TGT) to put more than 1,000 ATMs in Target and Target Greatland stores.
E*TRADE Group chairman and CEO Christos Cotsakos calls the merger a "demonstration of the strength of the E*TRADE brand and its agility to seize opportunities."