Stifel Nicolaus to Acquire up to 55 Branches from UBS

Stifel, Nicolaus&Company, Incorporated, will acquire up to 55 branches of UBS Wealth Management Americas from UBS Financial Services Inc. for an upfront cash payment of about $27 million, the company announced.

The acquisition means that Stifel Nicolaus, the brokerage subsidiary of Stifel Financial Corp., with the added UBS branches, will have a combined 1,650 financial advisers, with $65 billion in assets under management (AUM).

The 55 branches are located in 24 states and employ 500 associates, including nearly 320 financial advisers with approximately $15 billion in assets under management, according to a press release. In 2008, these branches generated estimated total revenue of approximately $116 million, including approximately $100 million in compensable adviser revenue. All financial conditions are variable and to be based on the actual number of branches and advisers acquired, to be determined in approximately 35 to 45 business days,
Stifel Financial said.

The company will also acquire $215 million in Reg U and Reg T loans and $1.7 billion in money market and FDIC insured balances.
Stifel Financial said it expects the deal to close during the third quarter.

In addition to the $27 million payment, additional financial aspects of the deal include annual performance-based earn-out payments for two years following the closing of the transaction and aggregate payments of up to approximately $19 million for net fixed assets and employee forgivable loans. In addition to the above payments, Stifel Nicolaus has agreed to acquire other client related assets, and assume certain liabilities, associated with the branches acquired.

“The addition of these UBS branches represents a unique strategic fit. The addition of this talented group of professionals furthers our efforts to meet our goal of expanding across the country and further build upon Stifel’s recent growth achieved through our successful acquisitions and integrations of the Legg Mason Capital Markets Group in 2005, Ryan Beck in 2007 and Butler Wick last year,’ Stifel Chairman and Chief Executive Officer Ronald J. Kruszewski commented.

Jamie Price, Head of UBS Wealth Management Advisor Group, Americas, added, “This transaction is beneficial for both firms. It positions UBS to continue to gain market share in strategic markets which are key to our long-term growth. We also believe these branches will be able to integrate smoothly onto Stifel’s platform and the financial advisers would continue to grow and assist their clients in meeting their financial goals.’