Cetera Financial Group, a network of six independent broker-dealer firms, has disclosed a capital structure review and confirmed the retention of Goldman Sachs & Co. LLC to support the review process.
The company says that the objective of the review is to optimize its capital structure, lower costs, and maximize continued investments.
While Cetera has not confirmed any potential strategic alternatives, Bloomberg and industry publications reported that the company was exploring a potential sale that could command up to $1.5 billion and had tapped investment banks to explore its options.
Robert Moore, CEO of Cetera, said, “Our recent financial success and robust business performance coupled with the future trajectory of our profession, make this the opportune time to review our capital structure.”
The broker-dealer network is comprised of Cetera Advisors, First Allied Securities, Brokerage Services, Cetera Advisor Networks, Cetera Financial Institutions, and Cetera Financial Specialists.
Cetera became an independent, privately held organization following the pre-planned bankruptcy of its former parent company, RCS Capital Corp in 2016. Robert Moore took over as chief executive officer in September 2016 after the departure of Larry Roth, who saw Cetera through the bankruptcy process.
RCS Capital was hit hard after it was revealed in October 2014 that American Realty Capital Properties, another company controlled by RCAP founder Nicholas Schorsch, intentionally left a $23 million accounting error uncorrected. The bankruptcy terms included a recapitalization by RCS Capital’s first and second lien lenders.
Cetera Financial Group is the second-largest independent financial advisor network in the nation by number of advisors, as well as a leading provider of retail services to the investment programs of banks and credit unions.