Stifel Financial to Buy Barclays' U.S. Wealth Management Unit

NEW YORK (The Deal) -- Stifel Financial (SF), the St. Louis, Mo.-based brokerage and investment bank, announced on Monday its agreement to acquire London-based Barclays' (BCS) U.S. wealth and investment management unit, Barclays Wealth Americas.

The terms of the deal were not disclosed. The deal is expected to close in mid-November 2015.

Stifel shares opened at a 52-week high on Tuesday of $58.47, but spent the day below that level, and were trading back at Monday's closing price of $57.84 late Tuesday afternoon.

As of last month, Barclays had about 180 financial advisors in the U.S. managing around $56 billion in assets, with each advisor handling an average of more than $300 million in assets, according to the announcement. In the U.S., Barclays' advisory business is concentrated in New York and 11 other major cities. The unit was created following Barclays' acquisition of the private investment management division of Lehman Brothers Holdings in 2008.

According to Stifel's investor presentation, Barclays has on-balance sheet assets of about $1.4 billion, and approximately $1.5 billion of client loans held through Barclays' clearing firm.

Credit Suisse (CS) analyst Christian Bolu said the deal is strategically attractive as it bolsters Stifel's capabilities within the high-net-worth private wealth business. The Barclays acquisition also gives Stifel enhanced capabilities in alternatives investing and capital markets -- these will be useful tools for attracting other high-net-worth advisors, he continued.

Bolu estimates that deal accretion will likely be between 5% and 10%. He also said Stifel could pay up to 1.75 times revenue for the unit, which would put deal value between $300 million to $570 million, depending on the revenues the unit generates.

Stifel will "continue looking at acquisitions," Bolu said, adding that CEO Ron Kruszewski is acquisitive and has a good track record of doing successful deals. The company has made dozens of acquisitions under his leadership. The company's last acquisition was of Birmingham, Ala.-based Sterne Agee Group in February for $150 million in cash and stock, which closed last week. The company also acquired New York-based investment bank KBW for $575 million in 2012. Deals that add to Stifel's capabilities could be targeted, Bolu said, such as a brokerage, advisory business, or trading business, he said.

Stifel and Barclays declined to comment.

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