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Omega Research and OnlineTrading.com Agree to $300
Million Merger To Create World's First Institutional
Level Trading Platform For the Active Online Trader
Combination Heralds Next Phase of Online Trading
Revolution
MIAMI and BOCA RATON, Fla., Jan. 20 /PRNewswire/ --
Omega Research, Inc. (Nasdaq: OMGA - news), a leading
provider of real-time analytical tools for active
traders, and OnlineTradinginc.com Corp. (Nasdaq: LINE
- news), a leading direct ECN access online broker for
active traders, today announced a definitive agreement
to merge the two companies in an all-stock combination
valued at approximately $300 million. The combination
will create the world's first institutional level
trading platform for the active trader.
The strategic combination of these companies will
create a seamlessly-integrated trading platform that
will for the first time, deliver a complete solution
to the active trader: powerful decision-support
analytics, streaming real-time market quotes and news,
and direct ECN online order execution.
The agreement calls for Omega Research shareholders to
receive one share of common stock of a newly-formed
holding company, Online Trading Group, Inc., for each
share of Omega Research currently held. The exchange
ratio for OnlineTrading.com shareholders will range
from 1.3817 to 1.7172 shares of Online Trading Group
common stock for each share of OnlineTrading.com. The
exchange ratio for OnlineTrading.com decreases to the
extent, if any, that the average last sale price of
Omega Research stock for the 10-day trading period
ending on the third trading day prior to the closing
of the merger has appreciated. The 1.3817 exchange
ratio is reached if the average last sale price of
Omega Research common stock has appreciated to $8.01
per share. At the 1.7172 exchange ratio, Online
Trading Group will be owned approximately 57% by Omega
Research shareholders and 43% by OnlineTrading.com
shareholders. At the 1.3817 exchange ratio, Online
Trading Group will be owned 62% by Omega Research
shareholders and 38% by OnlineTrading.com
shareholders. Omega Research currently has 26.4
million shares outstanding on a fully-diluted basis,
and OnlineTrading.com currently has 11.7 million
shares outstanding on a fully-diluted basis. The
merger will be accounted for as a pooling-of-interests
and constitute a tax-free reorganization.
Bill Cruz, co-chairman of the board and co-chief
executive officer of Omega Research, said, ``This
strategic merger will position us at the forefront of
the online trading revolution. The online brokerage
business is expanding at an accelerating pace, but
what most observers lose sight of is that about 20
percent of online traders represent about 80 percent
of online trading volume. By integrating Omega
Research's best-of-breed analytics technology with
OnlineTrading.com's state-of-the-art order execution,
we believe that we will be offering a unique and
compelling solution to that 20 percent.''
Steven zum Tobel, president of OnlineTrading.com,
said, ``With over 40,000 users world-wide, Omega
Research's TradeStation has clearly established itself
as the industry-leading decision support tool for the
active trader. Its ability to empower a user to
design, historically test and automate custom trading
strategies is unmatched. Seamlessly integrating this
powerful tool with OnlineTrading.com's order-execution
technology will, we believe, create a complete
solution that will appeal not only to the tens of
thousands of TradeStation users, but to all active
online traders who are searching for a better
solution.''
Closing of the transaction, which is currently
expected to occur in May, is subject to customary
closing conditions, as well as NASD approval of a
change of control of OnlineTrading.com, a licensed
broker-dealer, and the filing with the SEC and
effectiveness of a registration statement for Online
Trading Group's shares and the listing of such shares
on The Nasdaq National Market. While the merger is
also subject to approval by shareholders of both
companies, managements of the two companies each
represent more than the requisite majority of shares
required to approve the merger.
Online Trading Group Management
While the individual businesses will continue to be
run by their pre-merger management teams, the
companies disclosed the proposed structure of Online
Trading Group, the new holding company formed to
facilitate the merger. Omega Research executives
William R. Cruz and Ralph L. Cruz will serve as
co-chairmen and co-chief executive officers; Salomon
Sredni has been named president and chief operating
officer; Marc J. Stone will be the company's vice
president, general counsel and secretary; Gregg F.
Stewart will serve as chief financial officer and vice
president of finance and treasurer; and Janette Perez
has been named vice president of advertising and
sales. OnlineTrading.com executives Farshid Tafazzoli
and Steven zum Tobel will be named vice presidents of
Online Trading Group. Andrew A. Allen, Chairman and
CEO of OnlineTrading.com, has announced that upon
completion of the merger he has decided to leave the
management team to devote time to his family. The
board of directors of Online Trading Group will
initially consist of eight members: Five members,
including two independent directors, designated by
Omega Research; and three members, including one
independent director, designated by OnlineTrading.com.
About OnlineTrading.com
OnlineTrading.com offers real-time direct ECN trading
over the Internet and through traditional brokers. The
firm caters to a client base of active traders
composed of high net worth individuals and small to
mid-size financial institutions. It has approximately
$750 million in customer assets. The firm's customers
can choose the exchange, market maker or ECN that
executes their trade. OnlineTrading.com's policy of
not accepting payment for order flow helps ensure that
customers receive the best available execution. The
company maintains a clearing and custodial
relationship with Bear Stearns.
About Omega Research
Founded in 1982, Omega Research, Inc. is a leading
provider of branded real-time trading tools for the
active trader.
Omega Research's principal products currently include
TradeStation®2000i, OptionStation®2000i,
RadarScreen(TM)2000i, and Omega Research
ProSuite(TM)2000i. Omega Research's 2000i line of
software products is compatible with the following
real-time Internet and broadcast data services: Data
Broadcasting Corporation's (Nasdaq: DBCC - news)
eSignal (Internet), InSite (Internet), and BMI
(Broadcast); Data Transmission Network (Nasdaq: DTLN -
news) DTN Real Time and DTNstant (Broadcast); and
Hyperfeed Technologies, Inc.'s (formerly PC Quote,
Inc.) (Nasdaq: HYPR - news) Hyperfeed(TM) (Internet
and Broadcast). With the click of a mouse, the 2000i
products can use the Internet to access the on-line
brokerage services of E*Trade (Nasdaq: EGRP - news)
and Wall Street Access.
WindowOnWallStreet.com, the company's new Internet
service, due to be launched next week, offers traders
award-winning tools as well as streaming real-time
charts, quotes, news, portfolio updates and more. For
additional information about the service, visit
http://www.WindowOnWallstreet.com.
Later this year, Omega Research intends to launch
TradeStation.com, which the company believes will be
the Internet's first decision support portal dedicated
to serving the needs of the active trader.
TradeStation.com will combine all the strategy
development, back-testing and automation of
TradeStation with the streaming real-time delivery of
market information and all other features and
functions incorporated in WindowOnWallStreet.com.
Omega Research intends to support the launch of
TradeStation.com with aggressive advertising and use
the company's experienced direct sales force to market
it to active traders.
The company plans to offer WindowOnWallStreet.com to
third-party partners as a business-to-business
solution.
Conference Call:
Today at 11:00 AM EST, Omega Research will host an
analyst conference call to discuss the Company's
strategic merger with OnlineTradinginc.com Corp. The
conference call will be broadcast live, on-line from
the Company's ``corporate'' page at
http://www.omegaresearch.com and at
http://www.streetfusion.com . A rebroadcast of the
call will be accessible at these websites from
approximately 3:00 p.m., January 20, 2000, to
approximately 11:45 p.m., January 25, 2000.
Visit the Omega Research web site at
www.OmegaResearch.com.
This press release contains statements that are
forward-looking and are made pursuant to the safe
harbor provisions of the Private Securities Litigation
Reform Act of 1995. When used in this press release
the words ``believes,'' ``plans,'' ``estimates,''
``expects,'' ``intends,'' ``anticipates,'' ``may,''
``will,'' ``should,'' ``could,'' ``upcoming'' and
similar expressions, to the extent used, are intended
to identify forward-looking statements. All
forward-looking statements are based largely on
current expectations and beliefs concerning future
events that are subject to substantial risks and
uncertainties. Actual results may differ materially
from the results suggested herein. Factors that may
cause or contribute to such differences include, but
are not limited to, the failure to consummate the
merger at all (or on a timely basis) due to regulatory
issues or other reasons; difficulty integrating the
companies from technology, operational and marketing
aspects; potential NASD or other regulatory issues
arising from the merger, the integration of the
technologies, the anticipated co-marketing of the
companies' respective products and services, and the
planned resignation of Andrew Allen upon closing of
the merger; the success (and cost) of marketing
strategies; the new company's ability to effectuate
and further develop its Internet strategies and to
develop and market the products and services described
in this press release at all or on a timely basis (and
the costs associated therewith); their acceptance in
the marketplace; technical difficulties or errors in
the products and/or services; market pressure to lower
substantially or eliminate pricing on the types of
Omega Research Internet subscription services
described as a result of such services being provided
at low or no additional costs by brokerages, financial
institutions and other financial companies to their
customers, or for other market reasons; Omega
Research's customer and active prospect base
containing a substantially lower number of interested
subscribers than the company anticipates;
OnlineTrading.com's client base not growing to the
extent anticipated or not being desirous of Omega
Research's analytical tools to the extent anticipated;
the new company's future participation in any merger
or other strategic alliance; unfavorable critical
reviews; increased competition (including product and
price competition); the level of market demand for
real-time decision support tools, real-time data
and/or on-line brokerage services and/or website
services generally; the scalability, performance
failures and reliability of the Financial Data Cast
Network; the entrance of new competitors into the
market; Omega Research's ability to develop
relationships with third parties to execute its
business-to-business strategy; timing and significance
of additional new product and service introductions by
Omega Research and OnlineTrading.com and their
competitors; general economic and market factors,
including changes in securities and financial markets;
the adequacy of working capital, cash flows and
available financing to fund the business models
described; and other risks and uncertainties indicated
from time to time in the companies' filings with the
Securities and Exchange Commission as well as their
other press releases.
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