's branches. As was rumored round these parts this morning. Full press release from Stifel Financial:
Stifel Financial Corp. (NYSE: SF) announced today that its principal operating subsidiary, Stifel, Nicolaus & Company, Incorporated, has entered into an exclusive agreement with UBS Financial Services Inc. ("UBS") to acquire up to 55 branches from the UBS Wealth Management Americas branch network.
The 55 offices are located in 24 states throughout the country, and employ an aggregate of approximately 320 Financial Advisors, who have approximately $15 billion in assets under management, including $215 million in Reg U and Reg T loans and $1.7 billion in money market and FDIC insured balances. In 2008, these branches generated estimated total revenue of approximately $116 million, including approximately $100 million in compensable Financial Advisor revenue. The transaction is structured as an asset purchase for cash at a premium over certain balance sheet items, subject to adjustment. The payments to UBS include:
* An upfront cash payment of up to approximately $27 million based on the actual number of branches and Financial Advisors acquired by Stifel Nicolaus;
* Annual earn-out payments for the two-year period following the closing of the transaction principally based on the performance of the UBS Financial Advisors who become Stifel Nicolaus employees; and
* Aggregate payments of up to approximately $19 million for net fixed assets and employee forgivable loans.
The above payments are variable based upon the number of Financial Advisors and branches acquired by Stifel Nicolaus. 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 number of employees, branches and assets to be acquired by Stifel is expected to be determined in approximately 35 to 45 business days. The acquisition is expected to be accretive to Stifel's earnings in the first year and is expected to close in one or more closings to be completed during the third quarter of 2009.
Stifel Chairman and Chief Executive Officer, Ronald J. Kruszewski, commented, "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."
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 Advisors would continue to grow and assist their clients in meeting their financial goals."
The asset purchase agreement contains certain customary representations, warranties, and covenants on the part of Stifel Nicolaus and UBS. The consummation of the transaction is subject to a number of customary closing conditions and the approval of all required governmental and other regulatory entities.