Tradek.com, the online stockbroker, has acquired stockbroker EW Balderson (EWB) from the directors of EWB and Saambou for a minimum of R14 million in a share swap deal.
It has simultaneously entered into a cross-selling agreement with Saambou where Tradek will establish a new division. The division will develop online banking products and services with Saambou to offer to Tradek`s clients. Tradek will also market and provide its existing online investment services to Saambou`s clients.
The purchase price for EWB is a minimum of R14 million and a maximum of R25.1 million, subject to certain warranties being met. The acquisition will be settled by the issue of Tradek shares at 55c per share. EW Balderson`s MD John Balderson will join the Tradek board.
"The acquisition is in line with Tradek`s strategy to increase its private client base and will boost Tradek`s existing client base by another 10 000," says Tradek chief executive Paul Theron. "This further entrenches the company`s position as SA`s leading online stockbroker, with over 30 000 clients."
The new Tradek division, to be established in association with Saambou, is to be launched early in April 2000. The price payable by Tradek to Saambou for exclusive rights to cross-sell online stockbroking services to Saambou`s clients is to be settled in Tradek shares, based on profits of this division over three years.
Saambou will be able to achieve a maximum of 40% shareholding in Tradek by the end of the three-year period if the three-year profit targets are met. This includes Saambou`s initial shareholding following the EWB transaction. Saambou also has the right to immediately appoint a director to the Tradek board of directors.
EWB provides a range of services to private and institutional clients including equity dealing, bond trading and portfolio management. It was established in 1931 and has assets under management in discretionary accounts in excess of R200 million.
"The extension of online financial products beyond equity trading is a crucial part of our strategy, and is in line with global leaders in the online investing market," concludes Theron.
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