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Industry Spotlight > Mergers and Acquisitions

Focus Financial Q2 Revenue Up 30%

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Focus Financial Partners’ revenue in the second quarter soared 30% from last year to $301.5 million. The RIA acquirer and deal-maker says it added two new partner firms and wrapped up nine mergers for existing partner firms in the period. 

Through Thursday, the firm says it completed 30 transactions, including six acquisitions and 24 mergers. “We participate in a multitrillion-dollar industry that is experiencing rapid secular growth and consolidation,” according to CEO and Chairman Rudy Adolf.

The firm’s net income was $3.1 million in Q2’19 vs. a loss of $7.7 million a year ago. On an adjusted basis, profits jumped to $41.2 million, or $0.55 per share, from $29 million, or $0.44 per share. 

“We had an excellent second quarter and first half of 2019, characterized by the strong performance of our partner firms and access to highly attractive opportunities to deploy our capital,” Adolf said in a statement.

Focus says most of its roughly $70 million of revenue growth came from its existing partner firms, accounting for about $41.5 million — mainly tied to higher wealth management fees, including those associated with mergers. 

The remaining increase of about $28.5 million resulted from revenue acquired by new partner firms during the past 12 months.

The firm also says its organic revenue growth was 18%, higher than the 16.7% for the prior-year quarter and tied to results from 27 mergers completed since July 1, 2018. Focus Financial says it expects organic revenue growth for the third quarter to top 15%.

“We have already exceeded our 2018 full-year deal volume by 20% and our second-half transactional momentum remains strong,” according to CFO Jim Shanahan.