Summary

Other Scenarios:

Buyer: E TRADE Financial Corporation (ETFC) Last Price: 9.19 Market Cap.: 2.62B
Target: TD Ameritrade Holding Corp. (AMTD) Last Price: 17.46 Market Cap.: 9.87B

Lines of Business Summary:

Product Summary:

Overlap & Complementary Sectors

Sector Buyer Target # of Focused Companies
Finance 1,131
Banking   528
Domestic Banks   491
Commercial Banks   339
Investment 163
Asset Management and Financial Advisory   38
Institutional/High-Net Advisory   12
Securities Sales and Trading 47
Brokerage Services 23
Custody, Clearing, and Settlement 5
Technology   804
Software   248
Enterprise Management   66
Enterprise Resource Planning (ERP)   24

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Sample Products in Similar Lines of Business

Sample Products in Complementary Lines of Business
Buyer (Total: 7)
  • E*TRADE Capital Markets, LLC
  • E*TRADE Securities LLC
Target (Total: 5)
  • TD Ameritrade - ThinkorSwim (TOS)
  • TD Ameritrade Corporate Services
  • Amerivest
  • Ameritrade Advisor Services
Buyer
  • E*TRADE Bank
  • Howard Capital Management
  • Kobren Insight Management
  • E*TRADE Clearing LLC
Target
  • TD Ameritrade Corporate Services

Business Relationship Summary:

Top Key Suppliers

Top Key Customers
Buyer (Total: 4)
  • Mack-Cali Realty Corp. (CLI)
  • Evercore Partners Inc. (EVR)
  • Keynote Systems, Inc. (KEYN)
  • Jive Software Inc (JIVE)
Target (Total: 3)
  • Toronto-Dominion Bank (USA) (TD)
  • Mack-Cali Realty Corp. (CLI)
  • SolarWinds, Inc. (SWI)
Buyer (Total: 0)

n/a
Target (Total: 1)
  • Edelman Financial Group Inc (EF)

Key Financial Summary:

Key Metrics

  Buyer Target
Number of Employees 3,024 5,319
Revenue Per Employee 812,130.5 524,975.7
Total Revenue 555.0 654.8
Total Expenses 507.3 426.3
Other Revenue 9.6 22.1
Cost of Revenue 319.8 260.2
SG&A Expense 125.2 101.6
Research & Development n/a n/a
Other Operating Expense 29.4 24.2
Operating Income 47.7 228.5
Unusual Income 4.4 n/a
LT Debt to Capital 46.19 24.38
Fwd P/E 18.05 14.87
Fwd P/Rev 1.36 3.44
Book Value 4,928.0 4,138.3
Curr Portion of LTD/Cap Lease n/a n/a

Individual Company Summary

Focused

Buyer

Focused (): Finance > Investment > Securities Sales and Trading > Brokerage Services

Target

Focused (): Finance > Investment > Securities Sales and Trading > Brokerage Services > Retail

Business Description

Buyer

E*TRADE Financial Corporation (E*TRADE) is a financial services company, which provides online brokerage and related products and services to the individual retail investors, under the brand E*TRADE Financial. It also provides investor-focused banking products, primarily sweep deposits and savings products, to retail investors. The Company?s subsidiaries include E*TRADE Bank, which is a federally chartered savings bank that provides investor-focused banking products to retail customers nationwide and deposit accounts insured by the Federal Deposit Insurance Corporation (FDIC); E*TRADE Capital Markets, LLC, which is a registered broker-dealer and market-maker; E*TRADE Clearing LLC, which is the clearing firm for the brokerage subsidiaries and is a wholly owned operating subsidiary of E*TRADE Bank, and E*TRADE Securities LLC, which is a registered broker dealer. The Company operates in two business segments: trading and investing, and balance sheet management.

Target

TD Ameritrade Holding Corporation (TD Ameritrade) is a provider of securities brokerage services and technology-based financial services to retail investors, traders and independent registered investment advisors (RIAs). The Company provides services through the Internet, a national branch network and relationships with RIAs.

Deal Summary

Key Ratios

  Buyer Target
Gross Margin % 47.91 62.41
Operating Margin % 15.41 37.65
Quick Ratio 1.95 1.68
Current Ratio 0.73 1.18
Coverage Ratio n/a n/a
Total Assets 47,940.5 20,080.5
Return on Equity % 12.72 62.31
Return on Assets % 1.31 12.84
Cash+ ST Inv. Per Share 11.84 12.59
Total Debt 9,246.0 1,347.1
Total Debt to Equity % 187.62 32.55
Total Debt to Tangible Equity % 341.44 200.98
Debt to Asset % 19.29 6.71

Product Summary

Sector Buyer Target
Finance
Banking  
Domestic Banks
The Domestic banking sector includes banks operating in the United States.
  
Investment
Asset Management and Financial Advisory
The Asset Management and Financial Advisory branch profiles services and companies involved in directly managing personal and institutional portfolios and investment instruments, as well as advisory services like retirement and financial planning, asset allocation, and risk assessment. Banks are generally not attached to the Asset Management and Financial Advisory branch unless their asset management or financial advisory subsidiaries clearly operate with a significant level of independence from the company's core banking operations. Asset Management targeted specifically at Retail customers are considered part of Retail Brokerage and Financial Management in the Securities Sales and Trading section.
  
Securities Sales and Trading
The Securities Sales and Trading subsector consists primarily of services provided by investment firms acting as agents between a buyer and seller of securities, usually charging a commission, and are registered with the exchange where the securities are traded. Securities exchanges and ECNs are also included.
Technology  
Software  
Enterprise Management
Software designed to maximize the efficiency and productivity with which the enterprise is run. Includes Customer Relationship Management (CRM) and Enterprise Resource Planning (ERP) software.
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Product Details

Sector Buyer Target
Finance
Banking  
Domestic Banks  
Commercial Banks  
Internet Banks
Commercial banks that conduct their operations online. This does not include the internet operations of brick and mortar commercial banks.

Buyer Products:

  • E*TRADE Bank
  
Investment
Asset Management and Financial Advisory  
Institutional/High-Net Advisory  
Private Wealth Management
Financial advisory and/or asset managements services for high net worth individuals.

Buyer Products:

  • Howard Capital Management
  • Kobren Insight Management
  
Securities Sales and Trading
Brokerage Services
Institutional
Market Maker/Specialists
Brokerages that hold an inventory of shares or contracts of a security, commodity, currency, futures and options and facilitate the trading of that security, commodity, currency, futures and options by quoting a buy and sell price with the goal of profiting off the bid/offer spread. The NYSE and AMEX have Designated Market Makers, formerly known as "specialists", who act as the official market maker for a given security. The market makers provide a required amount of liquidity to the security's market, and take the other side of trades when there are short-term buy and sell side imbalances in customer orders. The NASDAQ employes several competing official market makers in a security. These market makers are required to maintain two-sided markets during exchange hours and are obligated to buy and sell at their displayed bids and offers.

Buyer Products:

  • E*TRADE Capital Markets, LLC
  
Trade Execution
Brokerages that execute the buying and selling of securities, commodities, currencies, futures and options on behalf of institutional clients in futures and options and currency markets.

Buyer Products:

  • E*TRADE Capital Markets, LLC
  • E*TRADE Securities LLC

Target Products:

  • TD Ameritrade - ThinkorSwim (TOS)
  • TD Ameritrade Corporate Services
Retail
Retail Advisory
Retail Advisory services includes a range of wealth management, retirement planning, trust, and financial advisory services targeted primarily at individuals and families. Companies and service offerings placed at this level may include some high net worth clients, but the services are generally accessible to investors with more moderate levels of wealth and income.

Target Products:

  • Amerivest
  • Ameritrade Advisor Services
  
Retail Brokerage Services
Brokerage services targeted primarily at retail and active traders. Online brokerages are included. Also includes brokerage and other support services offered to registered investment advisors (RIAs).

Buyer Products:

  • E*TRADE Securities LLC

Target Products:

  • TD Ameritrade - ThinkorSwim (TOS)
  • TD Ameritrade
Custody, Clearing, and Settlement
Custody, Clearing, and Settlement includes a range of support services offered to financial institutions. Custody is the holding and administering of securities on behalf of third parties. A Clearing House is a financial institution that provides clearing and settlement services for financial and commodities derivatives and securities transactions that may be executed on a futures or securities exchange. Clearing Houses act as intermediaries and reconciles orders between transacting parties (a.k.a. "member firms or "clearing participants"). Settlement services refer to the accounting of securities that are transferred against payment, typically when parties are not members of the same clearing firm. Mutual funds, investment advisors, banks, and insurance companies often outsource these operations to companies placed here. Companies that offer prime brokerage services are included here.

Buyer Products:

  • E*TRADE Clearing LLC

Target Products:

  • TD Ameritrade Corporate Services
Technology  
Software  
Enterprise Management  
Enterprise Resource Planning (ERP)  
Human Resources  
Benefit/Payroll Management
Software that aids in the management of the workforce, performing functions such as benefit and payroll management.

Buyer Products:

  • Equity Edge
  

- Focused. Denotes that the company is considered focused in this area. In general, Focused Companies draw the majority of their earnings in the sector/product area specified.

- Sector Pure-Plays. Denotes that the company is focused in the selected sector and generates nearly all earnings in the sector/product area specified.

- Sector Participation. Denotes that the company develops products in this line of business.

Relationship Details

Key Competitors

  Name Dir Rel. Revenue % Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Overlap
  Interactive Brokers Group, Inc. n/a 699.432 10.89 10.61 0.48 0.50 1.22
FXCM Inc n/a 186.306 19.89 10.97 0.46 0.51 5.86
Track Data Corporation n/a 8.375 12.34 n/a 0.27 n/a 0.36
Buyer
  TD Ameritrade Holding Corp. n/a 9,874.599 15.73 14.87 3.57 3.44 14.73
Interactive Brokers Group, Inc. n/a 699.432 10.89 10.61 0.48 0.50 1.22
Bancorp Inc n/a 295.447 23.67 13.89 14.04 2.19 1.12
Gain Capital Holdings Inc n/a 221.924 6.53 7.62 1.15 1.03 1.43
FXCM Inc n/a 186.306 19.89 10.97 0.46 0.51 5.86
Track Data Corporation n/a 8.375 12.34 n/a 0.27 n/a 0.36
Target
  Citigroup Inc. n/a 97,868.009 8.60 7.82 1.76 1.19 0.69
Bank of America Corp n/a 79,585.565 n/a 9.93 2.25 0.82 0.56
Morgan Stanley n/a 39,237.214 12.69 9.71 0.80 1.13 0.63
The Charles Schwab Corporation n/a 15,492.542 17.28 17.82 3.30 3.07 2.01
E TRADE Financial Corporation n/a 2,621.115 17.00 18.05 1.11 1.36 0.97
Interactive Brokers Group, Inc. n/a 699.432 10.89 10.61 0.48 0.50 1.22
FXCM Inc n/a 186.306 19.89 10.97 0.46 0.51 5.86
Track Data Corporation n/a 8.375 12.34 n/a 0.27 n/a 0.36
FMR, LLC n/a n/a n/a n/a n/a n/a n/a
Scottrade, Inc. n/a n/a n/a n/a n/a n/a n/a

- Defined by the Company - Defined by Others

Dependent Suppliers

  Name Dir Rel. Revenue % Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Overlap
  Mack-Cali Realty Corp. n/a 2,550.202 35.59 10.89 3.46 3.62 1.34
Buyer
  Mack-Cali Realty Corp. n/a 2,550.202 35.59 10.89 3.46 3.62 1.34
Evercore Partners Inc. n/a 787.883 61.12 14.95 0.98 1.09 n/a
Keynote Systems, Inc. n/a 336.516 7.04 22.61 3.02 2.53 2.84
Jive Software Inc n/a n/a n/a -26.59 n/a n/a n/a
Target
  Toronto-Dominion Bank (USA) n/a 70,605.786 12.10 10.02 7.57 3.08 2.32
Mack-Cali Realty Corp. n/a 2,550.202 35.59 10.89 3.46 3.62 1.34
SolarWinds, Inc. n/a 2,525.278 40.83 32.63 13.71 9.79 20.64

- Defined by the Company - Defined by Others

Key Customers

  Name Dir Rel. Revenue % Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Target
  Edelman Financial Group Inc n/a 224.779 20.43 17.02 1.06 1.13 1.19

- Defined by the Company - Defined by Others

Key Partners

  Name Dir Rel. Revenue % Market Cap. P/E Ratio (TTM) Fwd P/E P/R Ratio (TTM) Fwd P/Rev Price To Tang. Book Value
Buyer
  Comcast Corporation n/a 74,638.418 19.38 14.20 1.48 1.21 n/a
Citadel Investment Group, LLC n/a n/a n/a n/a n/a n/a n/a
Target
  Toronto-Dominion Bank (USA) n/a 70,605.786 12.10 10.02 7.57 3.08 2.32
Edelman Financial Group Inc n/a 224.779 20.43 17.02 1.06 1.13 1.19

- Defined by the Company - Defined by Others

Financials

  Buyer Target Combined Entity
Income Statement
Operating Items
Revenue 2,324.6 2,657.6 4,982.3
Other Revenue 39.3 107.2 146.4
Total Revenue 2,363.9 2,764.8 5,128.7
Cost of Revenue 1,231.3 1,039.3 2,270.6
SG&A Expense 478.8 409.7 888.5
Depreciation & Amortization 115.7 163.4 279.2
Interest Expense n/a n/a n/a
Other Operating Expense 154.3 110.1 264.4
Unusual Expense (Income) 19.5 1.4 21.0
Total Expenses 1,999.7 1,724.0 3,723.7
Operating Income 364.2 1,040.8 1,405.0
Non Operating Items
Interest Expense (Inc.), Net Non-Oprtng -87.7 -14.4 -102.1
Other, Net n/a n/a n/a
Income Before Taxes 185.3 1,014.7 1,200.0
Income Taxes 28.6 370.0 398.6
Income After Taxes 156.7 644.7 801.4
Net Income - Excl. Xord. Items 156.7 644.7 801.4
Net Income - Incl. Xord. Items 156.7 644.7 801.4
Income Avail. to Common 156.7 644.7 801.4
Share Items
Basic Avg. Shares Outstanding 285.2 549.7 834.9
Basic EPS - Excl. Xord. Items 0.60 1.14 0.96
Basic EPS - Incl. Xord. Items 0.60 1.14 0.96
Full Dilution Adjustment n/a n/a n/a
Fully Diluted Shares Outstanding 285.2 555.3 840.4
F.D. EPS - Excl. Xord. Items 0.54 1.13 0.95
F.D. EPS - Incl. Xord. Items 0.54 1.13 0.95
Dividends Per Common Share n/a 0.21 0.21
Balance Sheet
Assets
Cash and Equivalents 3,375.4 6,988.7 10,364.1
Accounts Receivable 17,159.1 9,623.7 26,782.8
Inventory n/a n/a n/a
Other Current Assets n/a n/a n/a
Current Assets 7,698.7 11,644.9 19,343.6
Accum D&A n/a n/a n/a
PPE, Net 299.7 315.0 614.7
Goodwill & Intangibles 2,220.0 3,468.0 5,688.1
Long Term Investments 21,925.6 68.9 21,994.4
Other Assets 2,960.7 1,189.3 4,150.0
Other LT Assets n/a 4.7 4.7
Total Assets 47,940.5 20,080.5 68,020.9
Liabilities
Accounts Payable 5,590.9 13,681.8 19,272.7
Payable/Accrued n/a 463.7 463.7
ST Debt 5,015.5 n/a 5,015.5
Other (Current) Liabilities n/a 46.3 46.3
Current Liab. 10,525.9 9,865.5 20,391.4
LT Debt 4,230.5 1,334.4 5,564.9
Capitalized Lease Obligations n/a 12.7 12.7
Total LT Debt 4,230.5 1,334.4 5,564.9
Deferred Taxes n/a 346.8 346.8
Other LT Liab. 28,175.7 925.9 29,101.5
Total Liabilities 43,012.5 15,942.1 58,954.6
Shareholders Equity
Common Stock 2.9 6.3 9.2
Additional Paid in Capital 7,306.9 1,574.6 8,881.5
Retained Earnings -1,995.1 3,510.5 1,515.3
Treasure Stock n/a -916.8 -916.8
Other Equity -386.6 4,138.3 3,751.7
Total Equity 4,928.0 4,138.3 9,066.3
Total Liab. & Equity 47,940.5 20,080.5 68,020.9
Shares Outstanding 285.4 548.4 833.8
Cash Flow
Operating Cash Flow
CF Net Income 163.0 492.7 655.8
CF Depreciation 250.6 50.6 301.2
CF Amortization n/a 72.5 72.5
CF Deferred Taxes 23.6 -4.4 19.2
Other Non-Cash Items -342.0 37.2 -304.9
Change in Working Capital 481.7 56.2 537.8
Total Cash From Operating Activities 576.9 704.8 1,281.7
Investing Cash Flow (not calculated)
Capital Expenditures -71.9 -122.7 -194.6
Other Investing Cash Flows -328.7 -5.3 -334.0
Total Cash From Investing Activities -400.6 -128.0 -528.5
Financing Cash Flow (not calculated)
Dividends Paid n/a -85.5 -85.5
Purchase Or Sale of Stock n/a -343.9 -343.9
Purchase and Retirement of Debt 1.4 -12.3 -11.0
Other Financing Cash Flow -873.1 3.5 -869.7
Total Cash From Financing Activities -871.8 -438.2 -1,310.0
Exchange Rate Effects n/a -0.0 -0.0
Net Change in Cash -695.4 138.6 -556.9
Cash Taxes Paid 1.1 267.1 268.2
Cash Interest Paid 286.3 25.0 311.3