LPL Financial, the nation’s largest independent broker-dealer, has acquired the independent broker-dealer network of National Planning Holdings Inc. Advisors affiliated with NPH’s broker-dealer subsidiaries serve approximately $120 billion of client brokerage and advisory assets.
The transaction is structured as an asset purchase with an initial purchase price of $325 million. LPL will also make a contingent payment between $0 and $123 million in the first half of 2018, which will be based on the level of NPH’s business that onboards onto LPL’s platform.
“The demand for financial advice continues to grow, and the independent model is the fastest growing part of the industry,” said Dan Arnold, LPL Financial president and CEO. “We are committed to being a leader in our core markets, so we are excited to announce our purchase of NPH which brings us together with one of the largest U.S. independent broker-dealer networks.”
Under the transaction structure, LPL will onboard NPH advisors and client assets onto its platform rather than integrating NPH’s operations, although NPH will maintain its operations during the onboarding period.
LPL plans to onboard NPH advisors in two waves that it anticipates completing by the end of the first quarter of 2018. After the onboarding waves are complete, LPL will make a contingent payment between $0 and $123 million.
If less than 72 percent of NPH production is onboarded, no contingent payment would be due. If 72 percent or more is onboarded, the payment increases on an interpolated basis. LPL estimates the transaction can generate $75-100 million of run-rate EBITDA accretion by the end of 2018 depending on the level of onboarding of NPH client assets.
LPL will hold a conference call today at 8:00 a.m. EST that will include comments from president and CEO Dan Arnold and CFO Matt Audette. The conference call can be accessed by dialing either 877-677-9122 (domestic) or 708-290-1401 (international) and entering passcode 71559986.
The conference call will also be webcast simultaneously on the investor relations section of the company’s website, and a replay will be available until September 6, 2017. A telephonic replay will be available approximately two hours after the call and can be accessed by dialing 855-859-2056 (domestic) or 404-537-3406 (international) and entering passcode 71559986. The telephonic replay will be available until August 23, 2017.
LPL Financial is a subsidiary of LPL Financial Holdings Inc. (NASDAQ: LPLA) and served approximately $542 billion in brokerage and advisory assets as of June 30, 2017. LPL is the nation’s largest independent broker-dealer and provides proprietary technology, comprehensive clearing and compliance services, practice management programs and training, and independent research to more than 14,000 financial advisors and over 700 financial institutions.