Sterne Agee Group in deal to acquire midsize independent broker-dealer WRP Investments
April 10, 2014
By Bruce Kelly, Investment News
B-D M&A rages on as Sterne Agee grabs WRP
Broker-dealer mergers and acquisitions continue to sizzle as Sterne Agee Group Inc. Thursday is expected to announce the purchase of a midsize independent broker-dealer, WRP Investments Inc.
David Pintaric, president and second-generation owner of WRP, confirmed the firm’s sale, terms of which haven’t been released, he said.
“This is a marriage made in heaven,” Mr. Pintaric said.
“Companies have been calling me for 11 years” to inquire about buying the firm, he said, but he waited until now.
WRP has 350 affiliated registered representatives and advisers, and produced $48 million in gross revenue last year, Mr. Pintaric said.
It is based in Youngstown, Ohio.
Sterne Agee is based in Birmingham, Ala.
“We are a family-oriented company,” Mr. Pintaric said. “Sterne Agee is just like us — with Southern accents.”
Sterne Agee is a large, privately held regional brokerage firm in the Southeast and manages $17 billion in client assets, according to its website. Sterne Agee & Leach Inc. is its brokerage and clearing division.
Sterne Agee is interested in expanding its independent-contractor broker-dealer operations, Mr. Pintaric said.
Sterne Agee Financial Services Inc. now has about 270 independent contract reps, so the addition of WRP will more than double its number of independent reps, said Jay Carter, the CEO of Sterne Age Financial Services.
WRP currently clears brokers’ transactions with National Financial Inc., Fidelity’s clearing arm. The brokers’ client accounts will move in the coming weeks to Sterne Agee’s clearing platform, Mr. Pintaric said.
Reps often get nervous during acquisitions because changing clearing firms means a potential disruption to their business.
Mr. Pintaric said that will not be an issue for WRP reps and advisers. “There will be no disruption in the process,” he said. “Any paperwork to be done will be done” at the WRP home office, he said. Company employees will also have opportunities to work at Sterne Agee elsewhere, he said.
Broker-dealer M&A started this year with a bang. On consecutive days in January, nontraded-REIT czar Nicholas Schorsch said that he was buying Cetera Financial Group for $1.15 billion and J.P. Turner & Co. for $27 million. After a couple of quiet months, M&A resumed at the start of April when Hilltop Holdings Inc. and SWS Group Inc., the parent company of Southwest Securities Inc., said that they had entered into a definitive merger agreement.
Sterne Agee Financial Services Inc. has about 270 independent-contract reps, so the addition of WRP will more than double its number of independent reps, said Jay Carter, chief executive of Sterne Age Financial Services.
“We’re a wonderful alternative to the mega shops, for reps who want a smaller firm with the traditional resources of a full service broker-dealer. We’re one of the few independent firms that are self-clearing, but the reps aren’t going to get lost or just be a number,” Mr. Carter said.
“This sale will help Sterne Agee gain some needed scale,” said Jon Henschen, an industry recruiter. “For the WRP reps, they will see an improvement in technology and services.”