The Charles Schwab Corporation (NYSE:SCHW) and optionsXpress Holdings, Inc., (NASDAQ-GS:OXPS) today announced they have signed a definitive agreement under which Schwab will acquire optionsXpress. Under the terms of the agreement, optionsXpress stockholders will receive 1.02 shares of Schwab stock for each share of optionsXpress stock. Based on Schwab's closing stock price as of March 18, 2011, the transaction values each optionsXpress share at $17.91, resulting in a total transaction value of approximately $1.0 billion. Both companies will initially retain their separate brand identities, while benefitting from significant synergies and capabilities across their complementary business lines. The deal is expected to close during the third quarter, subject to optionsXpress stockholder approval and regulatory approvals, along with customary closing conditions.
Launched in 2001 and headquartered in Chicago, optionsXpress is a pioneer in retail online brokerage services focused on equity options and futures. Its innovative brokerage platform provides active investors and traders with trading tools, analytics and education to execute a wide variety of investment strategies. An innovator and technology leader among brokerages, optionsXpress has consistently ranked among the top online brokerages by third party reviewers including 4 out of 5 stars from Barron's on Usability, Trade Experience, Trading Technology, Range of Offerings, Research Amenities, Portfolio Analysis & Reports, and Customer Service & Education in 2011, the company's tenth year of recognition for excellence by that publication. It also received The Options Insider's 2010 Broker of the Year Award; and was rated 5 stars (highest) for Trading Tools by SmartMoney in 2009. As of February 28, 2011, optionsXpress had 385,200 client accounts, $8.1 billion in client assets and a 12 month average of 44,800 daily average revenue trades.
Schwab operates the nation's largest independent brokerage in terms of client assets, which totaled $1.6 trillion as of February 28, 2011. The company was founded in 1973 as one of the original discount brokerages serving independent and active investors. Today Schwab serves nearly ten million individual investor, independent registered investment advisor and corporate retirement plan participant accounts with a wide range of financial products and full-service investment help and advice.
The combination of optionsXpress and Schwab will offer active investors an unparalleled level of service and platform capabilities. optionsXpress' industry-leading and award-winning client tools will be well received by our existing active investor clients who are increasingly using options and other trading strategies as a key part of their total approach to investing, said Walt Bettinger, Schwab President and Chief Executive Officer. Options investors at Schwab tend to be among the larger, more active and longer-standing of our client relationships. optionsXpress brings a similar set of sophisticated, engaged clients, many of whom we believe will find the investing, brokerage and banking services available through Schwab to be a valuable complement to those they have through optionsXpress. The expected synergies of our combination make the acquisition a win-win-win for Schwab, optionsXpress and our many important active investor clients.
This combination of capabilities allows optionsXpress to bring our leading-edge trading and analytical technologies to one of the largest and premier brokerages in the world, said David Fisher, optionsXpress Chief Executive Officer. The union of our brands marks the beginning of a new era of capabilities and services focused on the retail investor. optionsXpress and Schwab share a passion for innovation and championing the self-directed investor, and together, we will leverage our combined strengths to unlock meaningful value for customers and stockholders.
We launched optionsXpress in 2001 with the vision of making options and futures trading more accessible for self-directed retail investors, commented James Gray, Founder and Chairman of the Board of optionsXpress. After ten years of successfully empowering hundreds of thousands of customers, we are excited to bring our experience with these products to a much larger audience.
Following the completion of the acquisition, Mr. Fisher will continue to lead optionsXpress as its President and a Schwab Senior Vice President.
Schwab estimates the acquisition will be modestly accretive over the first full year of combined operations, including expected revenue and expense synergies totaling approximately $80 million. On a pro forma basis, the combined organizations would have generated net revenues of $4.479 billion in 2010.
Certain stockholders representing 22.9% of optionsXpress stock have signed a voting agreement committing to vote these shares in favor of the transaction.