Transactions


$346 million Deal Value

has acquired

has acquired

Financial advisor to Charles Schwab

January 2004

Freeman & Co. Acted as Financial Advisor to Charles Schwab
Date
January 2004
Industry
Broker-Dealer
Transaction
Buy-Side M&A
Deal Value
$346,000,000

Schwab to acquire SoundView Technology Group - Combined organization will provide Institutional Investors with differentiated independent fundamental research and world-class trading platform

November 19, 2003 (Jersey City, NJ) – The Charles Schwab Corporation (NYSE: SCH - News), ("Schwab"), the fourth largest US financial institution ranked by client assets, and SoundView Technology Group, Inc. (Nasdaq: SNDV - News), ("SoundView"), a research-driven securities firm providing institutional investors with fundamental research on companies in technology, media, telecom, healthcare and other growth-related industries, today announced that they have reached a definitive agreement under which Schwab will acquire SoundView for $15.50 per SoundView share in cash.

Under the agreement, Schwab will begin a tender offer for all outstanding shares of SoundView. The tender offer will be followed by a merger in which all remaining SoundView shareholders will receive the same $15.50 per SoundView share in cash.

The addition of SoundView will allow Schwab Capital Markets L.P., ("SCM"), a subsidiary of The Charles Schwab Corporation, to provide institutional clients with a deep, differentiated fundamental equity research offering -- built on both firms' histories of delivering influential research -- combined with its client-focused trade execution capabilities. The combined organization will be named Schwab SoundView Capital Markets.

"Institutions, like individual investors, are demanding high-quality and independent research,  particularly as many traditional brokerage firms have cut back or restructured their offerings in the wake of the research-related controversies in recent years," said David S. Pottruck, Schwab CEO. "With the creation of Schwab SoundView Capital Markets we have an opportunity to take our powerful, value-added assets of liquidity and trading technology and build a differentiated institutional business based on execution quality and independent research. At the same time it is a major step in expanding Schwab's depth and breadth of market wisdom, which is a strategic imperative spanning our entire corporation."

"We believe that comprehensive research, in combination with our sales and trading platform and robust pool of liquidity available through the Schwab Liquidity Network(TM), will create a powerful solution for our institutional clients -- one that will be unmatched in the industry," commented Schwab Vice Chairman Lon Gorman. "On the SCM side, we're leveraging a nationally recognized brand; a large individual and institutional client base; integrated multiple distribution channels; market-oriented, political and quantitative analysis products; and an efficient, high-volume, technologically-advanced trade execution platform. These will be combined with SoundView's respected fundamental research brand, strong management team and research sales capabilities. Clients will have access to leading independent research and sales and trade execution from a single source. That's a compelling, valuable differentiator."

Schwab SoundView Capital Markets will be jointly managed by Mark Loehr, CEO of SoundView, and Larry Leibowitz, Executive Vice President -- Equities, SCM. Messrs. Loehr and Leibowitz will both report to Mr. Gorman.

"We are combining what we believe to be premium content with premier execution. This is a marriage of complementary strengths that benefits our clients, employees and shareholders," said Mark Loehr. "Schwab SoundView Capital Markets will harness high-quality, action-oriented and influential research with the trade execution excellence Dealipedia - Charles Schwab acquires Soundview and deep pools of liquidity characteristic of SCM. Institutional investors will have an unparalleled resource that provides them with actionable research, supported by a powerful trading execution platform that's fueled by multiple sources of liquidity – a winning combination. Additionally, as we join forces with Schwab, we have decided to exit our investment banking business, an important step as we work to build a new model of independent research."

"In just a short time, SCM has built a world-class institutional trading business from the ground up," said Larry Leibowitz. "Our institutional trading revenues have grown approximately 80% over last year, largely because our offer has resonated in the marketplace. SCM possesses many of the ingredients institutional clients desired: liquidity in a broad universe of stocks; unmatched electronic trading capabilities, as illustrated by the Schwab Liquidity Network(TM); and independent research and credibility. By acquiring SoundView, we're bolstering our institutional research offering to continue to grow this vital part of our business and become a market leader in the institutional world, just as we are with individual investors."