Interactive Investor plc (“Interactive Investor”) has agreed to acquire TD Bank Group’s European direct investing business, though the acquisition of the shares of TD Wealth Holdings (UK) Limited and TD Bank International S.A. (Luxembourg) (collectively, “TDDI”).
The acquisition will create the UK’s second largest online stockbroker* with assets under administration (AUA) of £18 billion.
On completion of the acquisition, customers will benefit from a combined business that seeks to build on Interactive Investor’s heritage as a low charge challenger broker and TDDI’s reputation as one of the UK’s leading online investing providers. TDDI also provides additional geographical reach, allowing customers to trade 32 markets, in nine currencies.
Post closing Interactive Investor and TDDI customers will enjoy the benefits of a business with the scale and financial strength to invest in leading technology, products and services.
The combined business will be firmly on the side of the individual investor; helping investors by providing efficient customer service, competitive and transparent charges, and easy access to online investment and saving services.
There will be no immediate change for the customers of either Interactive Investor or TDDI.
Interactive Investor’s acquisition of TDDI will be financed through an investment from funds advised by J.C. Flowers & Co. LLC, which, following completion, will have a majority shareholding in the combined business. Interactive Investor’s existing shareholders that are participating in thetransaction will also become shareholders in the combined company. Closing is expected in the first calendar quarter of 2017 subject to customary closing conditions, including receipt of required regulatory approvals from the FCA, CSSF and ECB, and the approval of Interactive Investor's shareholders.
The enlarged business will be led by Adam Seale, II plc’s current CEO. Hugo Van Vredenburch and Barry Bicknell, respectively II’s current Chairman and CFO, will be the Chairman and CFO of the combined business. John Tracy, current CEO of TDDI, will continue to assist during a transitional period to support the integration.
Commenting on the acquisition, Adam Seale, CEO of Interactive Investor, said: “This combination will bring real benefits to both Interactive Investor customers and TD Direct Investing customers. The enlarged Interactive Investor will have increased scale, expertise and resource, enabling it to provide customers with award winning online investment services at low charges. We look forward to welcoming all our new customers to Interactive Investor and championing the needs of individual investors.”
Leo Salom, Executive Vice President, TD Wealth, TD Bank Group, said: "We're very pleased to have reached this agreement with Interactive Investor, a highly regarded team who will ensure that TDDI customers continue to have access to excellent products, services and technology to meet their investing needs for the long term. With this transaction, we will remain focused on our core areas of growth in North America, where we are a top-10 financial institution with an ambitious agenda to expand our Wealth franchise, which currently serves 2.2 million clients and has more than $700 billion in client assets across Canada and the U.S.”
Tim Hanford, Head of Europe, J.C. Flowers & Co., said: "JCF has a long history of working with entrepreneurial management teams to deliver transformational change. This transaction will create a new leader in the investment sector for private investors at a time of industry change due to the low rate environment and a refocusing of priorities by global financial services groups. We look forward to working with Interactive Investor to complete this complex acquisition from TD, and to establish the combined business on an efficient operating platform that delivers innovative wealth management services to all its customers.”