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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) July 13, 1999
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E*TRADE Group, Inc.
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(Exact name of registrant as specified in charter)
Delaware 1-11921 94-2844166
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
4500 Bohannon Drive, Menlo Park, California 94025
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (650) 331-6000
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Four Embarcadero Place, 2400 Geng Road, Palo Alto, California 94303
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(Former name or former address, if changed since last report.)
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Item 2 ACQUISITION OR DISPOSITION OF ASSETS
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On July 12, 1999, E*TRADE Group, Inc. ("E*TRADE") entered into an
agreement with TIR (Holdings) Limited, a Cayman Islands company ("TIR"),
pursuant to which E*TRADE has agreed to acquire all of the outstanding ordinary
shares of TIR in exchange for an aggregate of approximately $122,372,500 of
E*TRADE common stock and TIR will become a wholly owned subsidiary of E*TRADE.
The amount of such consideration was determined based on arm's-length
negotiations between E*TRADE and TIR. The purpose of the acquisition is to
build E*TRADE's infrastructure by providing the first global cross-border
trading network for online investors and making trading in foreign securities
accessible to retail, corporate and institutional investors alike. The
acquisition is subject to the satisfaction of certain conditions and is intended
to be accounted for as a pooling of interests.
On July 13, 1999, the Registrant issued a press release announcing the
agreement to acquire TIR (Holdings) Limited, a copy of which is filed herewith
as Exhibit 99.1.
Item 7 FINANCIAL STATEMENTS AND EXHIBITS
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(a) Financial Statements of Business Acquired.
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The financial statements required by part (a) of Item 7 relating to
the acquired business referred to in Item 2 above are not currently available.
The required financial statements will be filed in an amendment to this Report
under cover of Form 8-K/A as soon as practicable, but not later than September
27, 1999, which is the first business day 60 days after the date that this
Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information.
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The pro forma financial information required by part (b) of Item 7 for
the acquisition transaction described in Item 2 above is not currently
available. The required pro forma financial information will be filed in an
amendment to this Report under cover of Form 8-K/A as soon as practicable, but
not later than September 27, 1999, which is the first business day 60 days after
the date that this Report on Form 8-K is required to be filed.
(c) Exhibits. The following document is filed as an exhibit to this
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report:
99.1 Press Release, dated July 13, 1999, issued by E*TRADE
Group, Inc. announcing the agreement to acquire TIR
(Holdings) Limited.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
E*TRADE Group, Inc.
(Registrant)
Date: July 27, 1999 By: /s/ Thomas A. Bevilacqua
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Thomas A. Bevilacqua
Executive Vice President and General
Counsel
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EXHIBITS INDEX
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Exhibit Description
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99.1 Press Release, dated July 13, 1999, issued by E*TRADE
Group, Inc. announcing the agreement to acquire TIR
(Holdings) Limited.
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EXHIBIT 99.1
E*TRADE Media Contacts E*TRADE Investor Relations Contact
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Tim Alban Susan Wolfrom
(650) 331-5865 (650) 331-5303
[email protected] [email protected]
Greg Xenakis
Neale-May & Partners
(650) 328-5555, ext. 142
[email protected]
E*TRADE ACQUIRES TIR HOLDINGS TO ADVANCE
CROSS-BORDER TRADING CAPABILITIES
Acquisition Adds Critical Element In
Drive to Develop First Online Global Trading Network
MENLO PARK, Calif. (July 13, 1999) - E*TRADE(R) Group Inc. (NASDAQ: EGRP)
today announced it has signed a definitive agreement to acquire TIR Holdings
Limited, an international financial services company offering global multi-
currency securities execution and settlement services, and a leader in providing
independent research to institutional investors. The acquisition is expected to
accelerate E*TRADE's goal of building the first global cross-border trading
network for online investors, making trading in foreign securities accessible to
retail, corporate and institutional investors alike.
TIR shareholders will receive E*TRADE common stock valued at approximately
$122 million in a transaction that is anticipated to be accounted for as a
pooling of interests. E*TRADE expects the transaction to be accretive to
earnings. Additionally, TIR's annual revenues, which were approximately $100
million for the 12 months ended April 30, 1999, will significantly diversify
E*TRADE's revenue base.
With more than 600 institutional clients, TIR is active in equity, fixed
income and currency markets in more than 35 countries and holds seats on
multiple stock exchanges around the world. E*TRADE intends to overlay its
technology architecture on the TIR network as part of a longer term strategy to
deliver the automation and performance to international investors that customers
experience today using E*TRADE-branded sites to buy and sell securities in their
domestic markets.
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E*TRADE Acquires TIR Holdings
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"Building the infrastructure for a global 24x7 business is central to
E*TRADE's financial services strategy," said Christos M. Cotsakos, chairman and
chief executive officer of E*TRADE. "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."
"The combination of TIR and E*TRADE will deliver significant value to our
combined customer base," said Judy Balint, president of E*TRADE International.
"TIR's existing base of institutional clients will benefit from the speed and
cost-efficiencies associated with our planned all-electronic global trading
network, and we are committed to continue the track record of exceptional
service established by TIR over the last decade. It is also planned that retail
customers of E*TRADE-branded sites around the world will gain access to
international markets - something only available to institutions and high-net
worth individuals until now."
"We are pleased and excited to add our international expertise to one of
the world's leading online financial services providers," said Hans Tiedemann,
chairman of TIR. "We see great synergies for our products and services, and
great benefits to our current institutional client base, and the broader market
of retail and corporate investors who are constantly seeking increased access to
international markets."
Global Expansion
E*TRADE is aggressively pursuing a global expansion strategy that leverages
its internationally recognized brand name, award-winning web site design, and
proprietary Stateless Architecture(SM) technology platform through joint
ventures and affiliate partners around the world. E*TRADE plans to launch
branded web sites in the top 20 financial markets worldwide. To date, E*TRADE
has introduced self-directed online investing through the launch of E*TRADE
Australia (which also serves New Zealand), E*TRADE Canada, CPR-E*TRADE (France)
and E*TRADE Sweden. E*TRADE and local joint venture partners expect to bring the
E*TRADE UK and E*TRADE Japan web sites online within fiscal 1999, which ends
Sept. 30, 1999.
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E*TRADE Acquires TIR Holdings
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In addition to developing domestic web-based investing services with
affiliate partners worldwide, E*TRADE intends to build a global electronic
network that will allow these investors to trade across borders. The first phase
of E*TRADE's electronic trading network will enable inbound cross-border trading
from international affiliates to the U.S. markets. E*TRADE expects the first
E*TRADE affiliates to begin U.S. inbound cross-border trading during the next 12
months.
"Integration of E*TRADE technology, with leveraged international financial
services relationships and content, is key to our long-term vision for the
company," said Balint. "TIR brings the cross-border financial services process
expertise that will aid in achieving the ultimate goal of straight-through
processing of a wide range of transaction types."
"An advanced trading network offering straight-through processing of
international trades is fully in line with the future requirements of our
market," said Jarrett Lilien, group chief executive officer of TIR. "By joining
E*TRADE, TIR is better positioned than ever to meet the needs of our
institutional customers."
Added Nicholas Bullman, group president of TIR, "E*TRADE is a world leader
in applying the Internet to the financial services industry. We believe an
Internet-based solution will offer tremendous advantages for our clients and
represent another important reason institutional investors choose TIR for their
clearing, settlement and execution services."
Additional TIR Synergies
TIR brings a range of other synergies and benefits to E*TRADE, among them
the ability to generate new revenue from global execution, clearing and
settlement, and a broader base of products that customers are expected to find
attractive based on varying market conditions.
TIR's independent research practice is another component of value in the
acquisition. TIR acquires research through independent analyst relationships.
Traditionally available only to institutional investors, this high quality
research eventually will be offered through E*TRADE-branded sites worldwide as
both value-added and for-sale research products.
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E*TRADE Acquires TIR Holdings
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TIR's research and analysis products and services are expected to advance
E*TRADE's strategy of providing the highest quality research, news and
information services to its customers, complementing analysis, news and
information delivered through other E*TRADE partners, including Banc Boston
Robertson Stephens, Reuters, TheStreet.com, BigCharts and others.
Time Table and Milestones
The acquisition is subject to the approval of various international
regulators, including U.S. regulators, as a result of TIR's presence in a number
of countries and E*TRADE's regulatory responsibilities in the United States.
Regulatory notification and approval of this acquisition is expected to be
completed later this summer and full integration of TIR's network, products and
services is expected to be completed in the next 12 months. E*TRADE's overall
globalization strategy and related technology development plans represent a
complex undertaking that is expected to take several years to complete. As part
of the definitive acquisition agreement, E*TRADE has reserved the right to
terminate the transaction in the event that its common stock price is, at the
time of closing, below an acceptable level. Donaldson, Lufkin & Jenrette acted
as financial advisor to TIR Securities in this transaction.
About E*TRADE
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E*TRADE, a global leader in online personal financial services, has emerged
as the world's most-visited online investing site. The content-rich Destination
E*TRADE web site offers value-added investing and research features, premium
customer service and a fully redundant, proprietary Stateless Architecture(SM)
infrastructure. E*TRADE intends to expand its global positioning by launching
branded web sites in the top 20 financial markets worldwide.
In recognition of its innovation and industry leadership, E*TRADE was
ranked the best online brokerage by Gomez Advisors (Summer 1999) and Lafferty
Information and Research Group (4Q98, 1Q99). E*TRADE also was the first
securities and financial services company to be awarded the WebTrust seal of
assurance by the American Institute of Certified Public Accountants (AICPA).
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E*TRADE Acquires TIR Holdings
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E*TRADE is committed to providing the most comprehensive financial services
experience on the Internet, as demonstrated by its acquisition of
Clearstation.com, a community-based financial analysis site, as well as
strategic investments in E*OFFERING, a full-service online investment bank, and
Archipelago, a leading Electronic Communications Network (ECN). E*TRADE also is
positioned to become the first pure-play e-commerce company in the financial
services sector - combining online banking and brokerage services - through a
definitive merger agreement with Telebanc, the nation's leading branchless bank.
It is anticipated that the Telebanc merger will close this fall.
E*TRADE Securities Inc. (Member NASD/SIPC), and its parent company, E*TRADE
Group Inc., are headquartered in Menlo Park, Calif.
About TIR Securities
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TIR Securities (TIR) is an independent brokerage organization with a
worldwide presence that offers a range of financial services and products
through its global multi-currency execution and settlement infrastructure. Since
its establishment in 1988, TIR has combined the traditional strengths of an
international broker with an innovative approach resulting in reduced costs,
enhanced efficiency and maximized responsiveness to its institutional client
base.
A key element of TIR's success is its international distribution
capability. Low overhead, operational efficiency and a strong presence in
worldwide financial centers enable TIR to provide low-cost, high-quality
executions in over 35 countries. TIR has established a global infrastructure
with dealing offices in Hong Kong, London, Melbourne, Manila, New York and
Tokyo. In addition, TIR has representative offices in Frankfurt, Geneva and
Paris. The administrative Head Office based in Dublin is part of the
International Financial Services Centre (IFSC).
Global infrastructure designed to provide a strong presence in each region,
combined with expert local knowledge, ensures high quality of execution across a
range of financial instruments, including equities, fixed income, and foreign
exchange. With over 600 institutional clients worldwide, TIR is well established
as a responsive and innovative provider of brokerage services.
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E*TRADE Acquires TIR Holdings
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Important Notice
E*TRADE is a registered trademark of the company. All other trademarks are
properties of their respective owners. The statements contained in this news
release that are forward-looking are based on current expectations that are
subject to a number of uncertainties and risks, and actual results may differ
materially. The uncertainties and risks include, but are not limited to, changes
in market activity, market acceptance of the new E*TRADE destination web site,
anticipated increases in the rate of new customer acquisition, the conversion of
new visitors to the site to customers, seasonality, the development of new
products and services, the enhancement of existing products and services,
competitive pressures (including price competition), system failures or
interruptions, economic and political conditions, changes in consumer behavior
and the introduction of competing products having technological and/or other
advantages. Further information about these risks and uncertainties can be found
in the information included in the annual report filed by the Company with the
SEC on Form 10-K (including information under the caption "Risk Factors") and
quarterly reports on Form 10-Q.
