| Online investment bank Wit Capital Group Inc. Monday made a move to expand to expand its research and initial public offerings with the acquisition of SoundView Technology Group.
Wit (WITC) will purchase all outstanding shares of SoundView for $320 million in newly-issued Wit shares and options. The boards of both companies have already approved the deal, which is expected to close in January.
Ron Readmond, Wit Capital's co-chief executive officer, said the deal will give its investors a much higher level of initial public offering opportunities in a broader selection of companies as well as more comprehensive online stock research.
"This transaction represents a major milestone in the ongoing evolution of Wit Capital and it results in a number of important benefits that will enable the company to fulfill our long-standing mission: To empower investors and issuers alike by transforming the capital-raising process through the use of the Internet," he said.
The companies said the deal will grow the number of research professions to more than 100 and the number of companies covered will more than quadruple to more than 200. It also expects the number of shares in initial public offerings to more than triple in the first year after the deal closes.
"Wit Capital is the ideal partner for SoundView. Our focus on core technology companies and institutional investors is the perfect complement to Wit Capital's Internet and individual investor emphasis. Together with our combined focus on value added research analysts, we become the 'must have' banking firm in Internet/technology transactions," said Russ Crabs, SoundView's president and chief executive officer.
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