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B Riley to purchase Wunderlich
Posted on Friday, 19 May 2017 12:14
B Riley Financial has agreed to acquire US broker Wunderlich Securities for roughly USD 67.00 million in order to enhance its wealth management business.

The consideration comprises USD 36.00 million in cash and the issue of 1.90 million stocks.

As a consequence, B Riley expects its earnings for fiscal 2017 to be positively impacted.

Chief executive of the buyer Bryant Riley stated: “In addition to significantly enhancing our wealth management business, Wunderlich’s brokerage and research franchises strategically align with our current operations and expand our capabilities with minimal overlap of clients and coverage.

“This strategic combination adds another steady cash flow business to our platform, which complements our existing high-margin, episodic liquidations and capital markets businesses.”

Wachtell Lipton Rosen & Katz and Brainerd Communicators have both been hired to advise the buyer on the deal, while Baker Donelson Bearman Caldwell & Berkowitz and Keef Bruyette & Woods are assisting the target.

The acquisition significantly enhances B Riley’s capital management business by adding USD 10.00 billion in assets under administration.

Completion is expected in June 2017, subject to the green light from certain regulatory bodies.

The combined entity will have around USD 11.00 billion in assets under management and 25 offices across the US.

Incorporated in 1996, Wunderlich offers wealth management, equity research and investment banking, and fixed income sales and trading services.

The Tennessee-based firm has 25 offices across 17 states and generated revenue of USD 116.90 million in the 12 months ended 31st March 2017.

Wunderlich is not B Riley’s first acquisition of 2017; in February the California-based diversified financial services company signed on the dotted line to pick up Virginia-headquartered investment bank FBR & Co for USD 160.00 million.

B Riley generated revenue of USD 52.90 million in the three months ended 31st March 2017, a significant increase on USD 19.95 million in the corresponding timeframe of 2016.

Net income for the first quarter of 2017 totalled USD 14.02 million (Q1 2016: USD 248,000).

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