Advisor Group, one of the nation’s largest networks of independent wealth management firms, and Ladenburg Thalmann Financial Services Inc. (NYSE: LTS), a publicly traded financial services company, have signed a definitive merger agreement to join the two companies. The transaction is expected to close in the first half of 2020.
Ladenburg has agreed to be acquired by Advisor Group through a cash merger, and each outstanding share of Ladenburg’s common stock will be converted into a cash payment of $3.50 per share. The combined company will have nine broker-dealers, with nearly 11,500 financial advisors and more than $450 billion in client assets.
Ladenburg stock closed at $2.81 on Monday but shot up 21.7 percent to $3.42 in after-hours trading following the announcement.
The total enterprise value of the transaction is approximately $1.3 billion, taking into account Ladenburg’s common stock, preferred stock and outstanding debt. The definitive merger agreement and the transactions were unanimously approved by Ladenburg’s board.
The transaction, which is subject to customary closing conditions, including the approval of Ladenburg’s shareholders, as well as required regulatory clearances and approvals.
Following the completion of this transaction, the expanded Advisor Group organization will continue to be led by its current chief executive officer and president, Jamie Price. When the transaction is completed, Advisor Group’s leadership team will include senior executives from both companies.
Ladenburg’s firms will not be merged with Advisor Group’s firms and will continue to operate under a multi-brand network model of firms.
Advisor Group’s network of firms consists of FSC Securities Corporation, Royal Alliance Associates, SagePoint Financial and Woodbury Financial. Ladenburg’s independent advisory and brokerage firms include Securities America, Triad Advisors, Investacorp, KMS Financial Services and Securities Service Network (SSN).
Additional Ladenburg subsidiaries include Highland Capital Brokerage, an insurance solutions brokerage; Premier Trust, a financial advisor-focused trust services company; and Ladenburg Thalmann & Co., a middle market investment bank.
“This is a transaction that maximizes value for our shareholders, while positioning our financial advisors for continued growth and success,” said Ladenburg chairman, president and CEO Richard Lampen. “We have always been impressed with Advisor Group’s platform, offerings and leadership.”
Because both firms use Pershing and National Financial (part of Fidelity Custody & Clearing Solutions) as their largest clearing providers, no repapering of client accounts will be necessary in connection with the transaction and its closing.
Advisor Group, Inc. is one of the nation’s largest networks of independent financial advisors serving more than 7,000 advisors and overseeing $271 billion in client assets.