Stifel Financial buying rival Sterne Agee in latest deal

AP News
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Posted: Feb 23, 2015 5:39 PM

NEW YORK (AP) — Stifel Financial Corp. is buying rival financial services firm Sterne Agee for $150 million, boosting its presence in money management and fixed income.

It's the latest move by Stifel, whose other large purchases include the investment advisory unit of Legg Mason last year, the investment bank KBW in 2013 and Thomas Weisel in 2010.

The St. Louis company said Monday that buying privately held Sterne Agee will add more than 700 financial advisers and independent representatives overseeing $20 billion in client money. It also wants Birmingham, Alabama-based Sterne Agee's fixed-income business, which includes corporate and government debt.

The combined company would have $300 million to $325 million in annual revenue. It would sell Sterne Agee's FBC Mortgage business back to the unit's founders and may spin off Sterne Agee's institutional equity and investment banking business.

It's a cash-and-stock deal, with shareholders still to decide if Stifel will issue 1.42 million or 1.62 million shares. Depending on which, Stifel will pay $77 million or $66 million in cash.

Stifel also on Monday said its profit fell 6.4 percent to $45.2 million, or 58 cents per share, in the fourth quarter.

Adjusted earnings came to 75 cents per share, while revenue rose 2.8 percent to $578.1 million. Analysts polled by FactSet predicted 78 cents per share on revenue of $581.6 million.

Stifel's stock rose $3.51, or 6.7 percent, to $55.60 in after-market trading Monday. Through the close of regular-session trading, it had gained 8.3 percent in the past 12 months.