Ladenburg Thalmann Buys Insurance Brokerage Highland for $42M

Highland Capital Brokerage acquisition marks Ladenburg's entrance into the wholesale life insurance marketplace

The deal helps Ladenburg expand into the “higher-margin, attractive wholesale distribution channel,” CEO Lampen says. The deal helps Ladenburg expand into the “higher-margin, attractive wholesale distribution channel,” CEO Lampen says.

Ladenburg Thalmann Financial Services Inc. (LTS) announced Friday that it has acquired Highland Capital Brokerage, Inc., an independent insurance brokerage company that delivers life insurance, annuities and long-term care solutions to investment and insurance providers, for approximately $42 million.

“The acquisition of Highland marks Ladenburg’s entrance into the wholesale life insurance marketplace and reflects our commitment to building a strong, diversified financial services organization,” said Phillip Frost, Ladenburg’s chairman and principal shareholder, in a press release. “We are excited to welcome Highland’s management, principals and associates to the Ladenburg Thalmann family and look forward to their continued success.”

Ladenburg President and CEO Richard Lampen added in a statement, “This acquisition marks an important step in our expansion into this higher-margin, attractive wholesale distribution channel.”

Highland brings 10 regional offices, 12 principals, 90 sales vice presidents, 55 corporate employees and approximately 135 field office staff to the Ladenburg family. For the 12 months ended June 30, Highland had revenues of nearly $46 million.

The current senior management team, along with Highland’s CEO Jim Gelder, will continue to operate Highland as a standalone business at its existing headquarters in Birmingham, Alabama.

 “Ladenburg’s commitment to preserving the management and culture of the firms it acquires affords us the flexibility to continue operating our business with no disruption to our firm principals, employees or clients, and presents exciting opportunities for all of our stakeholders,” Gelder said in a press release. “With the support of a publicly traded parent company, we will be better positioned to deliver a greater breadth and quality of services, particularly to our institutional clients and independent insurance producer partners.”

With this deal, Highland will be able to hire additional senior sales professionals, accelerate technology and infrastructure upgrades, provide greater training and development for its sales teams, and capitalize on opportunities in new markets.

The Highland acquisition will give “Ladenburg’s independent advisors — affiliated through subsidiaries Securities America, Triad Advisors and Investacorp — greater access to high-quality insurance solutions, enhancing the products and services they can deliver to their clients,” according to the press release.

The purchase price for the common stock of Highland was $12.7 million, consisting of about $3.6 million in cash and 2,540,762 shares of Ladenburg common stock. In addition, Ladenburg repaid Highland’s bank facility of $22.3 million, and $7 million of Highland’s promissory notes remain outstanding.

In July, Securities America, part of Ladenburg Thalmann (LTS), announced its acquisition of Dalton Strategic Investment Services, an Indiana broker-dealer with 60 advisors in 18 states, $950 million in client assets and about $7 million in yearly fees and commissions. Securities America also announced an agreement to acquire certain assets of Sunset Financial Services Inc., a full-service broker-dealer, from Kansas City Life Insurance Co., with 268 registered representatives in 48 states plus the District of Columbia, nearly $18 million in annual gross revenue and $2.4 billion in client assets.

 

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