From the June 2010 issue of Research Magazine • Subscribe!

Stifel Strikes Deal To Acquire Weisel

Stifel Financial and Thomas Weisel Partners Group have entered into a roughly $300-million merger agreement, several months after Stifel acquired 56 UBS branches.

If the merger is completed as planned by June 30, Stifel's 1,900 financial advisors could have access to Thomas Weisel private-equity and other products, as well as Thomas Weisel's Silicon-Valley clients, as early as this summer.

"We expect the combined firm to benefit from the investment banking, research, and sales and trading platforms of both firms, as well as the brokerage services offered by Stifel's global wealth management division and the strong venture capital relationships and expertise in growth companies of Thomas Weisel Partners," said Stifel Chairman, President and CEO Ronald J. Kruszewski in a press release.

Thomas Weisel's private-equity group includes an $890 million growth-oriented fund of funds; a $122 million health-care venture capital fund and a $253 million early-stage venture capital fund.

M&A Track Record

Stifel has been on a merger tear over the past few years.

It acquired Legg Mason's capital-markets division in late 2005. In early 2007, it bought Ryan Beck's private-client group and investment-banking divisions. In late 2008, it acquired 17 offices from Butler Wick.

And in October 2009, Stifel wrapped up its purchase of 56 UBS branches that included about 495 financial advisors and $16 billion in assets under management.

Upon completion of the UBS deal, Stifel said it had 1,716 employee advisors at 273 offices in 41 states and 184 independent-contractor advisors. It also said it would pay earn-out bonuses to acquired UBS advisors staying with the firm for two years, based on performance.

When it introduced the UBS deal in May 2009, Stifel anticipated combined assets under management of about $65 billion for its FAs and annualized revenue per advisor of $404,000.

With the Weisel deal, Stifel estimates total assets under management of $100 billion and annual revenues for the combined company should be about $1.6 billion.

"Stifel has one of the largest global wealth management groups with nearly $100 billion in client assets, which is a great complement to the combined investment bank," said Thomas W. Weisel, chairman and CEO of Thomas Weisel Partners in a prepared statement.

Upon the completion of the merger, Kruszewski and Weisel will be co-chairmen of the board, with Kruszewski serving as president and CEO of Stifel Financial. Stifel Financial will remain based in St. Louis.

"This is incredibly innovative," said Chip Roame, head of Tiburon Strategic Advisors, an industry consulting group. St. Louis-based Stifel "is showing that it is hungrier than others," Roame added. "It is thinking way out of the box.

"Good for them. When no one is looking, they make these interesting acquisitions. I'm very impressed and give Kruszewski a lot of credit," concluded Roame. "He is doing very well."

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