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RCS Capital Corporation (RCAP) is to acquire Cetera Financial Group, an independent broker-dealer headquartered in El Segundo, California, from Lightyear Capital for USD1.15bn in cash.
Following this transaction, Cetera and its subsidiaries will become part of RCAP's retail advice platform, complementing the recently announced acquisitions of Summit Brokerage Services and Investors Capital Holdings.
Valerie Brown (pictured), president and chief executive officer of Cetera, and her management team, will continue to operate Cetera's respective brands as part of the RCAP family of companies.
Nicholas S Schorsch, chairman of RCAP, says: "I have great respect for the fantastic work Lightyear and their executive team achieved in building value at Cetera. It has been great working with Don Marron, chairman, and the management group at Lightyear and we are excited to have the opportunity to build on their success as we craft the next iteration at Cetera.
"Our partnership with Valerie, her senior management team and all of the financial advisors across the US who have chosen to associate their practices with Cetera, represents for us a truly transformative event. We intend for RCAP to be the most important full-service financial services and securities distribution company in the industry by joining our financial advice practice, wholesale distribution and capital markets expertise, and continuously executing on these strategies through our transaction management group. Furthermore, it is our plan to rapidly build out our footprint across America in one seamless step with our family of independently operated retail firms, led by Cetera."
Formed in 2010 following the sale of three ING broker-dealers, Cetera is a financial services holding company that provides independent broker-dealer services and investment advisory services through four distinct independent broker-dealer platforms: Cetera Advisors, Cetera Advisor Networks, Cetera Financial Institutions and Cetera Financial Specialists.
With approximately 6,660 registered representatives across the US, Cetera will enable RCAP to grow its retail distribution footprint. Cetera's inclusion within RCAP's retail advice business line both complements and diversifies RCAP's revenue stream, which presently is derived from its wholesale distribution business, investment banking and capital markets services, transaction management and transfer agency lines of business.
Brown says: "I have devoted my career to serving the best interests of clients by providing a world-class platform for the financial advisors who serve them. In pursuit of this goal, Cetera Financial Group has become one of the preeminent retail advice platforms in the industry. By joining the RCS Capital family of companies, we become the cornerstone of the second largest independent financial advisor network in America and are positioned for even greater success in the future. Our shared vision for building a better industry through a combination of products, services and advice that begins and ends with the investor is what made the decision to merge an easy one."
The closing of the transaction is subject to FINRA approval and other customary closing conditions. The transaction is expected to close later in 2014.
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