LPL Financial to Acquire National Retirement Partners

Acquisition of fast-growing retirement plan specialist follows quickly after LPL's June 4 IPO filing

On the heels of its filing for a $600 million stock offering, LPL Financial Corp. announced July 14 an agreement to acquire California-based retirement plan specialist National Retirement Partners Inc. (NRP), which will form a new division called LPL Financial Retirement Partners.

NRP's CEO, president, and founder, Bill Chetney, will lead the new division upon completion of the transaction. The transaction is expected to close in the fourth quarter of 2010.

Financial terms of the transaction were not disclosed, and company officials declined to comment.

"With the filing of its S-1 registration statement, LPL Financial is in a quiet period. Accordingly, we have no comment beyond our public filing," a spokesperson for LPL Financial said.

LPL Holdings Inc., LPL's parent company, filed an S-1 statement with the SEC on June 4 to go public via an estimated $600 million stock offering. The nation's largest independent broker/dealer, LPL serves over 12,000 financial advisors and has 2,500 employees in its Boston, Charlotte, and San Diego offices.

The company has seen notable growth over the last few years, especially with the acquisition of three broker/dealers from Pacific Life in 2007. The National Retirement Partners acquisition strengthens the link to Pacific Life. NRP Chairman William Cvengros was Pacific Life's vice chairman and chief investment officer prior to joining PIMCO, where he served as CEO of PIMCO Advisors L.P., a publicly-traded asset management firm with over $300 billion of assets under management sold to Allianz AG in 2000. Cvengros joined NRP in an advisory capacity in 2005 and has served as chairman since December 2005, with responsibility for overall strategic direction and corporate strategy.

Nearly five years ago, LPL sold 60% of itself to two private equity firms, Hellman & Friedman LLC and TPG Capital, in a deal valued at $2.5 billion. Since then there have been a series of acquisitions including the Pacific Life buyouts. According to its SEC filing, LPL has seen a 14% growth rate in the number of reps since 2000, when it had just 3,570 advisors.

NRP, a private company based in San Juan Capistrano, California, has about 350 brokers, all of whom serve retirement plans. The company is listed as Inc. 500's second fastest-growing private company in the nation.

Grail Partners LLC served as financial advisor to NRP, with Latham & Watkins LLP as legal advisor to the company. K&L Gates LLP served as legal advisor for this transaction to LPL Financial.

The July 14 news release states that the transaction will have mutual benefits for both companies: "LPL Financial and its advisors will benefit from enhanced capabilities and growth opportunities with respect to the group retirement plan space, as well as IRA rollovers and other retirement-related services and solutions. At the same time, NRP advisors joining LPL Financial will benefit from the scale, resources and services offered by the LPL Financial broker-dealer platform, which will directly support the continued growth of their businesses."

Read a story about LPL Financial's plans to go public with a $600 million stock offering from the archives of InvestmentAdvisor.com.
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