Stifel Financial has entered into a definitive merger agreement to acquire Sterne Agee Group, Inc., one of the oldest and largest privately owned financial services firms in the US.
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Sterne Agee bolsters Stifel's Global Wealth Management segment with the addition of approximately 730 financial advisors and independent representatives nationwide managing over $20 billion in client assets, and complements Stifel's Fixed Income platform, adding depth and capabilities.
The transaction values Sterne Agee at approximately $150 million. The closing consideration consists of a combination of Stifel common stock, valued at $51.55 per share, and cash.
Depending on shareholder elections, the minimum amount of Stifel stock issued at closing is 1.42 million shares and the maximum amount issued is 1.62 million shares. Accordingly, the cash consideration will range from approximately $77 million to $66 million.
Stifel and Sterne Agee have agreed with the founders of the FBC Mortgage business to sell the business back to them. In addition, Sterne Agee has built a leading Institutional Equity and Investment Banking business. Stifel has committed to Sterne Agee and the professionals in Sterne Agee's Institutional Equity and Investment Banking business to operate it on a stand-alone, independent basis.
Stifel and Sterne Agee management believe that there is significant value in this business and have been approached by a number of suitable partners for the business and its professionals. Working together with these employees, Stifel is committed to finding the right partner, or, alternatively, considering all other strategic alternatives, including spinning off the Institutional Equity and Investment Banking business as a separate stand-alone entity.
The merger is subject to approval by Sterne Agee shareholders and is expected to close in the late spring, subject to regulatory approvals and customary conditions. The boards of directors of both companies unanimously approve the merger. ■