Recognizing that there are indeed some borders in cyberspace, leading online financial services company E*Trade (Nasdaq: EGRP) announced Tuesday that it would buy TIR Holdings Limited for $122 million (US$) in stock. The deal is aimed at accelerating E*Trade’s efforts to build a cross-border global trading network.
With headquarters in Dublin, Ireland and offices in Hong Kong, Manila, London, Melbourne, Tokyo and New York, TIR consists of an independent brokerage organization that offers trades in 35 countries and several stock exchanges around the world.
TIR boasts of a streamlined international distribution capability, allowing it to reduce overhead and cut costs. The company has more than 600 institutional clients worldwide and deals in equities, fixed income and foreign exchange.
It also provides research and analysis through a system of independent analysts, a service that E*Trade said it would offer to its customers on branded global sites. TIR racked up revenues of approximately $100 million the last fiscal year.
“Building the infrastructure for a global 24/7 business is central to E*Trade’s financial services strategy,” said company CEO, Christos Cotsakos. “E*Trade plans to deploy a highly-automated, cross-border trading network by combining TIR’s existing trading network, international expertise and research operations with E*Trade’s technology leadership and growing global brand.”
Eyeing The Globe
There’s little doubt that E*Trade views the whole world as its oyster — open and beckoning, with the prospect of a glistening pearl too tempting to ignore. It plans on building Web sites in the top 20 financial markets worldwide and is surely not done shopping around for companies to help it expand globally.
The company has recently launched new sites in Australia, Canada, Sweden and France and has two more opening in the United Kingdom and Japan by September.
While E*Trade customers have been merrily trading on exchanges in their host countries, the company has been erecting the platform that will allow them to trade across borders.
The TIR acquisition was a crucial link in the plan. It brings its European flair and experience in cross-border trading and will give E*Trade the platform to meet its goal of building U.S. inbound, cross-border trading within the next 12 months.
The deal still has to meet with regulatory approval and E*Trade says it plans on integrating TIR’s products and services within the next 12 months when the expected approval is granted.
E*Trade also said Tuesday that it is well-positioned to become the first “pure-play e-commerce company in the financial services sector” with its recent merger agreement with Telebank – one of the country’s leading branchless banks. The company expects the merger to close this fall.