TD Ameritrade Holding (AMTD)

 

 

On June 11, 2009, we acquired thinkorswim Group Inc. (“thinkorswim”). The acquisition enhanced our industry leadership position in client trades per day and will provide our clients with access to thinkorswim’s advanced trading technology, tools and services, as well as a leading investor education program. This acquisition is discussed in further detail in Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements: Note 2 — Business Combinations.

 

On February 4, 2008, we purchased a portion of Fiserv, Inc.’s (“Fiserv”) investment support services business by acquiring all of the outstanding capital stock of Fiserv Trust Company, a wholly-owned subsidiary of Fiserv. The acquisition added approximately $25 billion in client assets to TD AMERITRADE, including $15 billion held in more than 75,000 accounts managed by approximately 500 independent RIAs and $10 billion held in more than 2,000 plans administered by 80 independent third party administrators (“TPAs”). This acquisition is discussed in further detail in Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements: Note 2 — Business Combinations.

 

On January 24, 2006, we acquired the U.S. brokerage business of TD Waterhouse Group, Inc. (“TD Waterhouse”) from The Toronto-Dominion Bank (“TD”). The transaction combined highly complementary franchises to create a retail broker that we believe has the scale, breadth and financial strength to be a leading player in the increasingly competitive and consolidating investor services industry. The acquisition of TD Waterhouse provided us with a national network of over 100 branches, as well as relationships with one of the largest groups of independent RIAs. It also enabled us to provide our clients with a Federal Deposit Insurance Corporation (“FDIC”)-insured deposit account sweep alternative for their cash through an arrangement with TD Bank USA, N.A. (“TD Bank USA”).

 

 

 

On February 4, 2008, we purchased a portion of Fiserv, Inc.’s (“Fiserv”) investment support services business by acquiring all of the outstanding capital stock of Fiserv Trust Company, a wholly-owned subsidiary of Fiserv. The acquisition added approximately $25 billion in client assets to TD AMERITRADE, including $15 billion held in more than 75,000 accounts managed by approximately 500 independent RIAs and $10 billion held in more than 2,000 plans administered by 80 independent third party administrators (TPAs). This acquisition is discussed in further detail in Item 8, Financial Statements and Supplementary Data — Notes to Consolidated Financial Statements: Note 2 — Business Combinations.

 

On January 24, 2006, we acquired the U.S. brokerage business of TD Waterhouse Group, Inc. (“TD Waterhouse”) from The Toronto-Dominion Bank (“TD”). The transaction combined highly complementary franchises to create a retail broker with the scale, breadth and financial strength to be a leading player in the increasingly competitive and consolidating investor services industry. The acquisition of TD Waterhouse provided us with a national network of over 100 branches, as well as relationships with one of the largest groups of independent RIAs. We also now provide our clients with a Federal Deposit Insurance Corporation (“FDIC”)-insured money market sweep alternative for their cash through an arrangement with TD Bank USA, N.A. This acquisition is discussed in further detail under the heading “Acquisition of TD Waterhouse” in Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations.

 

 

We intend to capitalize on the growth and consolidation of the
retail brokerage industry in the United States and leverage our
low-cost infrastructure to grow our market share and
profitability. Our long-term growth strategy is to increase our
market share of client assets by providing superior offerings to
long-term investors, RIAs, and active traders. We strive to
enhance the client experience by providing sophisticated asset
management products and services, enhanced technological
capabilities that enable self-directed investors to trade and
invest in new asset classes and a superior, proprietary,
single-platform system to support RIAs. The key elements of our
strategy are as follows:

 

 

 

On February 4, 2008, we purchased a portion of Fiserv,
Inc.’s (“Fiserv”) investment support services
business by acquiring all of the outstanding capital stock of
Fiserv Trust Company, a wholly-owned subsidiary of Fiserv.
The acquisition added approximately $25 billion in client
assets to TD AMERITRADE, including $15 billion held in more
than 75,000 accounts managed by approximately 500 independent
RIAs and $10 billion held in more than 2,000 plans
administered by 80 independent third party administrators
(TPAs). This acquisition is discussed in further detail in
Item 8, Financial Statements and Supplementary
Data — Notes to Consolidated Financial Statements:
Note 2 — Business Combinations.

 

On January 24, 2006, we acquired the U.S. brokerage
business of TD Waterhouse Group, Inc. (“TD
Waterhouse”) from The Toronto-Dominion Bank
(“TD”). The transaction combined highly complementary
franchises to create a retail broker with the scale, breadth and
financial strength to be a leading player in the increasingly
competitive and consolidating investor services industry. The
acquisition of TD Waterhouse provided us with a national network
of over 100 branches, as well as relationships with one of the
largest groups of independent RIAs. We also now provide our
clients with a Federal Deposit Insurance Corporation
(“FDIC”)-insured money market sweep alternative for
their cash through an arrangement with TD Bank USA, N.A. This
acquisition is discussed in further detail under the heading
“Acquisition of TD Waterhouse” in Item 7,
Management’s Discussion and Analysis of Financial Condition
and Results of Operations.

 

 

 

On May 24, 2007, we entered into a stock purchase agreement with Fiserv, Inc. (“Fiserv”) pursuant to which one of our wholly-owned subsidiaries agreed to purchase a portion of Fiserv’s investment support services business by acquiring all of the outstanding capital stock of Fiserv Trust Company, a wholly-owned subsidiary of Fiserv. Under the stock purchase agreement, the initial purchase price payable at closing is $225 million in cash plus Fiserv Trust Company’s regulatory capital, subject to certain pre- and post-closing adjustments. An additional earn-out payment of up to $100 million in cash could be payable following the first anniversary of the acquisition based on the achievement of certain revenue targets. The closing of the transaction is conditioned upon obtaining certain regulatory approvals, Fiserv completing an internal reorganization of Fiserv Trust Company to transfer the investment administration services business, which we are not acquiring, to Fiserv, and other customary conditions. At the closing, we will enter into a transition services agreement with Fiserv under which Fiserv will service client accounts for up to six months (subject to extension) and will be compensated based on revenue earned during the term of the transition services agreement. Fiserv has agreed not to compete with the acquired business for three years, subject to certain exceptions. Each party’s indemnification obligations are generally limited to losses in excess of $3 million and less than $50 million. Either party can terminate the agreement if the closing has not occurred by January 24, 2008.

 

On January 24, 2006, we acquired the U.S. brokerage business of TD Waterhouse Group, Inc. (“TD Waterhouse”). The transaction combined highly complementary franchises to create a retail broker with the scale, breadth and financial strength to be a leading player in the increasingly competitive and consolidating investor services industry. The acquisition of TD Waterhouse provided us with a national network of over 100 branches, as well as relationships with one of the largest groups of independent RIAs. We also now provide our clients with a Federal Deposit Insurance Corporation (“FDIC”)-insured money market sweep alternative for their cash through an arrangement with TD Bank USA, N.A. See “Acquisition of TD Waterhouse” below for further information about this acquisition.

 

Prior to acquiring TD Waterhouse, we completed several other acquisitions, the two largest of which were a merger with Datek Online Holdings Corp. (“Datek”) in fiscal 2002 and the acquisition of National Discount Brokers Corporation (“NDB”) in fiscal 2001.

 

 

 

During fiscal 2004, we acquired Bidwell & Company and purchased the retail client accounts of BrokerageAmerica, LLC and Investex Securities Group, Inc. In fiscal 2005, we purchased the retail client accounts of JB Oxford & Company. These acquisitions followed the merger with Datek Online Holdings Corp. (“Datek”) in fiscal 2002 and the purchase of National Discount Brokers Corporation (“NDB”) in fiscal 2001. We intend to continue to be an acquirer by searching for other firms that fit one or more of our criteria.