Updated from 7:46 a.m. EDTFresh off a defeat in its efforts to merge with Ameritrade ( AMTD - Get Report), E*Trade ( ET - Get Report) said Monday that it is buying the U.S. online brokerage operations of Harrisdirect. Shares rallied on the deal, which E*Trades believes will add 17 cents a share to its earnings once completed. The stock was recently up $1.40, or 9%, to $16.26. E*Trade will exchange $700 million in cash for the unit, which has about 430,000 active accounts making up $32 billion in assets. The seller is BMO Financial ( BMO - Get Report), the Toronto-based holding company for Bank of Montreal. E*Trade said the acquisition will provide an immediate boost to its most closely watched metric, daily average revenue trades, to 130,000. The deal will boost its overall account total to 4 million and raise its total customer assets to $130 billion. "With the acquisition of Harrisdirect, we take a strategic step in further evolving our franchise. We accelerate our growth goals by extending our asset-gathering strategy and fully leveraging customer cash, order flow and borrowing relationships across our integrated platform," E*Trade said. "We will continue to actively pursue opportunities that enable us to further build out our distinct business model." E*Trade's efforts to merger with online rival Ameritrade were foiled in June when Ameritrade struck a deal to acquire TD Waterhouse from another Canadian bank, Toronto Dominion ( TD - Get Report).
More from Stocks
Tesla to Unveil New Pick-Up Truck on Thursday, but the Road Ahead Won't Be Easy
Tesla will face tough competition in the category.
4 Warning Signs That Will Indicate a Shift in Market Action
I still see no reason to be negative about this market.
AT&T Lost Subscribers Following End of 'Game of Thrones,' Says KeyBanc
The company's AT&T TV NOW, DirectTV and HBO platforms experienced subscriber declines in October, according to a note from KeyBanc.