Word of the deal came a month after the company announced the launch of Goldman Sachs PrimeAccess, which provides partner firms with Goldman research and equity products. The company initially announced agreements with a dozen brokerage firms with a combined total of 10,500 representatives. Among the partner firms are Advest Inc., Raymond James & Associates Inc. and Tucker Anthony Inc.
Schwab and TD Waterhouse, which together service 11 million accounts, say the deal will be a boon to their customers. For Schwab customers, says President and CEO David Pottruck, "This is an excellent opportunity to expand their exposure to new markets and investments and increase their market wisdom." The two rivals have cooperated in other areas in addition to creating Epoch in recent years.
Goldman Sachs research and IPOs will be available to all of Schwab‚s retail customers and advisory clients of Schwab Institutional, says spokesman Lance Berg. Details on how the products will be offered or whether there will be any extra fees still are being discussed, he says.
TD Waterhouse CEO Steve McDonald says, "This acquisition will provide TD Waterhouse customers with high-quality U.S. equity research and equity offerings from a world leading investment bank."
Discussions in mid-July were still ongoing on how Goldman Sachs will absorb Epoch, says Goldman Sachs spokesman Jon Murchinson. The deal was expected to close 30 days after its June 13 announcement. Epoch stopped updating its Web site on June 30. Berg noted that although several stakeholders were involved in Epoch, the company was run independently and ultimately decided itself to sell.
Epoch, which was founded with a focus on underwriting equity offerings for information-technology and Internet companies, was formed by Schwab, TD Waterhouse, Ameritrade and the venture-capital firms of Kleiner Perkins Caulfield & Byers, Trident Capital and Bismark Capital, all of which had an ownership stake.
TD Waterhouse customers had access to 17 IPOs underwritten by Epoch since its inception, says TD Waterhouse spokeswoman Melissa Fox.
Online brokers were mum on whether the falloff in technology and IPOs contributed to the sale. Ameritrade released a statement that says, "Monetizing our investment in Epoch enables us to deliver immediate value to our shareholders. The sale to Goldman Sachs brought Ameritrade shareholders a very good return on their investment. That profit will be reported in Ameritrade financial statements in the quarter the agreement is finalized."
Company Invests In Money Management Firm
Undiscovered Managers LLC in Dallas has taken a new partner.Orca Bay Partners LLC, a private-equity investment firm based in Seattle, has made a $7.94 million investment in the company, making it a 16% owner.
Mark P. Hurley, chief executive officer of Undiscovered Managers, noted that Orca Bay Partners‚ expertise has been in the field of money management and financial product distribution.