E*TRADE Financial Corp. has closed on a new $250 million revolver that may be used for costs related to two new acquisitions. The company completed the acquisition of the U.S.-based online brokerage operations of Harrisdirect from BMO Financial Group Oct. 6 and announced the acquisition of BrownCo. on Sept. 29. E*Trade is a financial services company, which includes trading, investing banking and lending for retail and institutional customers. "The revolver is largely a liquidity vehicle for us," said Robert Simmons, cfo. "It will be used for general corporate purposes, but that could include regulatory capital requirements that will come from the acquisition we announced."
BrownCo. is an online brokerage service of JPMorgan Chase. The $1.6 billion deal, upon completion, will give E*Trade about 4.3 million customer accounts, about $160 billion in customer assets and about 160,000 daily average revenue trades (DARTs). Simmons anticipates closing the BrownCo. transaction by the end of this year. "We're in a consolidating industry and we are going to look for whatever opportunities are there," he said.
He also said E*Trade has organic growth opportunities, specifically within the company's international operations. "The international operations [have seen] nice growth for us; that is one of the fastest growing areas for us," he said.
JPMorgan and Morgan Stanley lead the three-year, $250 million senior secured revolver. "They have been partners with us for a long time," Simmons said of the two leads. Six other banks were in the syndicate, but Simmons said those institutions have not been disclosed. He would also not disclose pricing, but said the deal has standard pricing and covenants and he is very happy with the terms the company received.