(June 15 – 09:40 ET) – E*TRADE Group, Inc. today announced that it has signed an agreement to acquire VERSUS Technologies Inc., a provider of electronic securities trading services for institutional and retail investors and owner of the E*TRADE Canada licence.

E*TRADE will gain access to the VERSUS retail and institutional client base as well as The VERSUS Network, a scalable proprietary electronic trading platform that it plans to incorporate into E*TRADE’s product offerings worldwide.

Under the terms of the agreement, VERSUS security holders will be entitled to receive approximately US$174 million of E*TRADE common stock. The merger is expected to be accounted for as a pooling of interests upon the satisfaction of certain requirements. The terms of the transaction are expected to provide the opportunity for a tax-deferred exchange of shares for Canadian resident holders of VERSUS shares.

“We believe VERSUS Technologies will directly contribute to the development of E*TRADE’s all electronic, financial hub which will ultimately link twenty of the top international equities markets. Together, we’ll now be able to expand our capabilities to empower success for customers not only in Canada but throughout the world,” Christos M. Cotsakos, chairman of the board and CEO of E*TRADE Group, Inc. said in a press release.

Canadian institutional investors using the VERSUS Network represent over 75% of Canadian listed equity under management. E*TRADE plans to incorporate the technology into its global cross border trading platform, enabling institutions and investment dealers worldwide to route orders globally through the VERSUS and E*TRADE networks. E*TRADE also plans to use the technology in a web-enabled institutional product currently under development.

E*TRADE will acquire 100 percent of E*TRADE Canada in the transaction. E*TRADE Canada’s customers will gain the future benefit of E*TRADE’s 24/7 global market access, information and world class trading technologies.

The VERSUS management team, including Douglas Steiner, chairman and CEO, and Colleen Moorehead, president, will continue to play significant roles in advancing E*TRADE’s overall global expansion strategy.

“We are excited about the opportunity to combine VERSUS’ state-of-the-art institutional trade order routing, matching, and management technology with E*TRADE’s strong global network, innovative technology and leading brand,” said Douglas Steiner.

VERSUS is expected to be renamed E*TRADE Canada Ltd. and to operate as a wholly owned subsidiary of E*TRADE. The agreement is subject to approvals by VERSUS shareholders, Canadian and US regulators and to other closing conditions.
-IE Staff