The following story appeared in Investment News on 8/17/11.
Securities America, the independent broker-dealer subsidiary of Ameriprise, will be acquired by Ladenburg Thalmann Financial Services Inc. for at least $150 million in cash, according to a statement released by the company this morning.
Ladenburg has been viewed as a leading suitor for Securities America, which has been on the block for several months.
The deal, which will be at least for $150M in cash “in initial consideration” will have the “potential for additional cash payments” if certain performance targets are met by Securities America in 2012 and 2013, according to the statement.
Ladenburg has recently expressed an interest specifically in expanding through acquisition, but hasn’t bought an independent broker-dealer in three years. It bought Investacorp Inc. in 2007, and purchased Triad Advisors Inc. the following year. Combined, the firms had 1,030 affiliated reps and advisers.
The B-D generated $41 million in revenue during the first quarter of this year.
“We believe that we have the opportunity through acquisition and recruiting to significantly expand our market share in this segment over the next several years,” Ladenburg Thalmann management wrote in May in its quarterly report.
Securities America, with more than 1,700 advisers, ranks as the 17th largest independent broker-dealer in the industry according to InvestmentNews data. It was acquired by Ameriprise in 1998.
Securities America has been occupied by hundreds of lawsuits and arbitration claims tied to its sale of private placements issued by Medical Capital Holdings Inc. and Provident Royalties LLC, both of which the Securities and Exchange Commission charged in 2009 with fraud.
Clients had an estimated $400 million in losses from those series of investments.
In April, Ameriprise offered a settlement of nearly $160 million to those Securities America clients.
In a filing in April, Ameriprise executives noted that a sale of the B-D subsidiary “would allow (Securities America) to focus on growth opportunities in the independent channel and would allow Ameriprise to devote its resources to the Ameriprise branded-advisor business.”