B. Riley Financial (RILY) , the firm purchasing brokerage FBR, has agreed to pay $67 million for Wunderlich Securities to cement the dominant position CEO Bryant Riley is building in small-cap investment banking.
Wunderlich, a closely-held Memphis, Tenn.-based company with a network of more than 200 financial advisers, will receive $36 million in cash, 1.9 million shares of B. Riley common stock and warrants to buy an additional 820,000 shares, the companies said in a statement Thursday. After the deal is completed, which executives expect to happen before the end of June, the combined firm will have $11 billion in assets under administration.
Los Angeles-based B. Riley climbed 2.2% to $14 in New York trading after the announcement. The shares have gained 41% in the past year, outpacing a 15% increase on the broader S&P 500, as traders speculated that finance firms would benefit from Washington's plans to loosen regulations after real-estate mogul Donald Trump won the White House in November and Republicans kept control of both houses of Congress.
Wunderlich adds specialized brokerage and advisory services for so-called retail, or individual, investors, complementing the broader array of institutional products that B. Riley gains with the $160 million acquisition of FBR, CEO Bryant Riley said in a telephone interview.
"I've worked with that team for years, and so has FBR, so we know them really, really well," he said.
Together the three companies will create an investment banking, research and brokerage firm that covers more than 700 companies, has one of the world's largest asset-valuation and transfer units and is the top bookrunner for initial public offerings of companies valued at $1.5 billion or less.