Announced this morning, Nicholas Schorsch and RCS Capital Corporation (RCAP) have agreed to purchase Cetera Financial Group, Inc (Cetera), an independent broker-dealer, from Lightyear Capital (Lightyear) for $1.15 billion in cash. The DI Wire, with the help of industry insiders, predicted this to be a logical purchase in October of 2013.
Cetera is comprised of four broker dealers through acquisitions dating back to February 2010. Lightyear first acquired three ING broker dealers; the former Multi-Financial Securities Corporation, Financial Network Investment Corporation, and PrimeVest Financial Services, Inc. Since then, the conglomerate has grown through acquisitions of Genworth Financial Investment Services, Walnut Street Securities and Tower Square Securities, the latter two acquired from the MetLife Broker Dealer Group.
In 2013 RCAP, a publicly traded holding company has been a busy entity since its public debut in June of 2013. Its initial IPO was June 5th. By June 12th it had agreed to purchase First Allied Holdings, an independent broker dealer with 1,500 registered representatives. Before the year was over, RCAP was in agreement to acquire two more IBDs, Investors Capital Corp and Summit Financial producing a team with over 2,300 reps.
This latest purchase of Cetera, adds over 6,500 reps to the mix boasting a network of close to 9,000 financial advisors.
William M. Kahane, CEO of RCAP, commented, “This transaction immediately affords us the benefits of scale, while setting the quality standard in the industry. It enables us to diversify our revenue streams and position our securities sales business to attract best-of-class third-party sponsors, thus mitigating concentration risk among our retail firms. It adds substantially to our assets under administration, and makes our overall enterprise uniquely attractive to other retail advice firms who believe they could benefit by aligning themselves with a dominant, well capitalized, public firm with a complete understanding of the industry and a demonstrated commitment to excellence.”
Nicholas S. Schorsch, Chairman of RCAP commented, “We intend for RCAP to be the most important full-service financial services and securities distribution company in the industry by joining our financial advice practice, wholesale distribution and capital markets expertise, and continuously executing on these strategies through our transaction management group. Furthermore, it is our plan to rapidly build out our footprint across America in one seamless step with our family of independently operated retail firms, led by Cetera.”
Will this be the end of the buying binge or will we all one day work for Mr. Schorsch?