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Is LPL Financial Up for Sale?

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LPL Financial (LPLA) is said to be exploring a possible sale of the company, along with other potential strategic moves, according to an exclusive news report from Reuters, which cites people familiar with the matter.

The independent broker-dealer is reported to be working with Goldman Sachs to explore a deal with private-equity firms, as well as other companies, as of Tuesday.

“As a matter of policy, LPL does not comment on rumors or speculation,” it said in a statement.

Year to date, the IBD’s stock is down about 23% vs. a gain of about 4.5% in the S&P 500.

In August, the firm said it is not giving all of its corporate employees merit-related pay raises this year. However, some of its 3,200 employees will be getting discretionary bonuses in 2016, and all staff members are eligible for annual bonuses.

“Earlier this week, we communicated to employees our decision to provide one-time discretionary bonuses to select employees instead of firmwide merit increases for 2016,” the company said in a statement at the time. “While our business remains strong, we believe continued market volatility and uncertainty warrants a more cautious approach to expense management at this time.”

The broker-dealer—which has corporate offices in Boston, San Diego and Charlotte, North Carolina — planned to award discretionary bonuses in the fall and annual bonuses in March 2017.

In the second quarter, LPL’s net income fell 5% year over year to roughly $48 million; revenue dropped about 7% year over year to $1.02 billion.

The firm had a nearly 5% decline in net income from the first quarter, in which it reported profits of close to $51 million; net revenues for the period rose 2% to $1.1 billion, as assets increased 9% to $485 billion.

The company plans to release its third-quarter results on Nov. 2. 

LPL became a publicly traded firm in 2010, with Goldman Sachs and Morgan Stanley serving as its senior underwriters. This came about five years after the firm sold a 60% stake to Hellman & Friedman of San Francisco and Texas Pacific Group of Fort Worth.

(Related: ‘Messy’ Times Are Behind LPL, CEO Casady Says)


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