It took a while, but the consolidation craze is back in the discount brokerage industry

TD AMERITRADE (NASDAQ:AMTD) is snapping up fast-growing thinkorswim Group (NASDAQ:SWIM) in a $606 million win-win deal.

For every thinkorswim share outstanding, TD AMERITRADE will pay $3.34 in cash as well as 0.398 freshly minted shares.

Based on TD AMERITRADE's close of $13.48 yesterday, that translates to $5.37 a share worth of stock -- or total consideration of $8.71 a share. That is a healthy 54% premium to where thinkorswim closed yesterday. TD AMERITRADE will then embark on a 28 million-share repurchase plan to completely offset the dilution of the stock-based part of the deal.

So how is TD AMERITRADE a winner here? Well, the deal is accretive. thinkorswim generated $87 million in pre-tax profits on $380 million in revenue over the past four posted quarters. The broker sees the deal adding between 3% and 7% to its bottom line next fiscal year, and 10% to 12% a year after the acquisition has been integrated. Even with TD AMERITRADE factoring the buyback into the "accretive" claim, it's still a great deal.

thinkorswim adds just 87,000 retail brokerage accounts, but they're an active lot. The average thinkorswim customer goes through a whopping 176 trades a year. Options trading is a big product at thinkorswim, doubling TD AMERITRADE's exposure to options transactions.

thinkorswim also runs the popular Investools investor education site, with 375,000 graduates. It's a good mix. I love companies that offer logical, vertical properties within their industries. Such as:

  • Steiner Leisure (NASDAQ:STNR) runs a network of spa training schools, and can then employ graduates across its bread-and-butter business of running spas on most of the major cruise lines.
  • The Knot (NASDAQ:KNOT) has parlayed its popularity as a top wedding planning site by launching sites for newlyweds and first-time moms.

The numbers show us that most Investools graduates haven't gone on to become thinkorswim retail brokerage customers. However, the upgrades that do occur help remove the sting from the typically high customer acquisition costs in the discount brokerage industry.

It's safe to predict that consolidation will continue. Charles Schwab (NASDAQ:SCHW) and E*Trade (NASDAQ:ETFC) are unlikely to let a rival grow unchecked. When AMERITRADE snapped up TD Waterhouse four years ago, E*Trade followed with a pair of acquisitions of its own.  Perhaps top online options brokerage optionsXpress (NASDAQ:OXPS) will be snatched up next.

Maybe Schwab and E*Trade will go after the remaining buyout candidates. Maybe Schwab will take the bold step of swallowing E*Trade whole before TD AMERITRADE does.

Party like it's 2005? You know it.

In the market for a new discount broker? The way that rates and initial deposits are bouncing around, I can't say that I blame you. Check the sponsored broker comparison table in the Discount Broker Center to see if you can find the bargain-minded brokerage outfit that's right for you.

Steiner Leisure and The Knot are Motley Fool Rule Breakers recommendations. Charles Schwab and optionsXpress Holdings are Motley Fool Stock Advisor picks. Try any of our Foolish newsletters today, free for 30 days

Longtime Fool contributor Rick Munarriz believes in self-service gasoline pumps and self-service stock brokerages. He does not own shares in any of the companies in this story. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.