Datek Online Holdings Corp, which runs the fourth-largest online brokerage, has secured $300m in private financing in exchange for an undisclosed minority stake in the company. The cash came from Paul Allen’s Vulcan Ventures Inc, Group Arnault – the French holding company that controls LVMH Moet Hennessy Louis Vuitton SA – and TA Associates Inc, a private Boston-based investment firm.
Although no further terms of the deal were disclosed, it has been reported that Group Arnault has invested just over half of the total $300m. Credit Suisse First Boston served as the placement agent for the transaction, which the company claims is one of the largest ever private equity investments in a technology company.
The announcement of the funding, which makes an initial public offering for the company unlikely any time soon, came just a week after Datek was censured by the Securities and Exchange Commission, which alleged that the online brokerage improperly made use of customer funds to cover other financial needs. The Iselin, New Jersey-based company insists, however, that the decision to pursue a private placement over an IPO had nothing to do with its regulatory woes.
