Charles Schwab Corp (NYSE:SCHW) announced Monday that it has agreed to purchase retail online brokerage firm optionsXpress (NASDAQ:OXPS) in all stock transaction valued at roughly $1.0 billion.
Under the terms of the deal, optionsXpress shareholders will receive 1.02 shares of Schwab stock for every share of optionsXpress held. Based on Schwab's Friday closing price, the offer is valued at $17.91 per share, representing a 17% premium to optionXpress' closing price on the same day.
optionsXpress, based in Chicago, is focused on equity options and futures, and provides retail investors and traders with trading tools and investment services. As of February 28, 2011, the company, which was rated five stars for 'trading tools' by Smart Money in 2009, had 385,200 client accounts and $8.1 billion in client assets.
Schwab, with more than 300 offices and 8.0 million client brokerage accounts, operates the nation's largest independent brokerage in terms of client assets, which totaled $1.6 trillion as of February 28.
Both companies said they will initially retain their separate brands, while benefitting from "significant synergies".
Schwab expects the acquisition will be modestly accretive over the first full year of combined operations, including anticipated revenue and expense synergies totaling around $80 million.
The deal is expected to close during the third quarter, subject to shareholder and regulatory approvals. Stockholders representing roughly 23% of optionsXpress have already signed lock up agreements to vote in favour of the transaction.
optionsExpress was up 15% in Monday morning trading at $17.63 as of 10:45am EST - below the offer price.