Southwest Securities sold as part of merger

Hilltop Holdings ups previous offer for SWS Group by 12.6%

Apr 1, 2014 @ 12:48 pm

By Bruce Kelly

After a dormant couple of months, broker-dealer mergers and acquisitions came to life Tuesday when Hilltop Holdings Inc. and SWS Group Inc., the parent company of Southwest Securities Inc., said that they have entered into a definitive merger agreement.

SWS shareholders will receive cash and Hilltop stock worth $7.88 a SWS share. Hilltop, which owns a bank mortgage lender and another financial services firm, First Southwest Co., already controls 24% of SWS common stock.

In January, Hilltop offered to acquire for $7 a share the remaining outstanding shares of SWS that it didn't control. Investors are therefore seeing a 12.6% premium over Hilltop's original offer.

Shares of SWS were trading at $7.85 a share Tuesday afternoon, up 38 cents, or 5%, after the merger announcement. For the year, SWS shares are up $1.77, or 29%.

“This transaction creates the leading Texas-based broker-dealer and provides PlainsCapital Bank access to a significant source of additional core deposits,” Hilltop chairman Gerald J. Ford said in a statement. “The merger will bolster our market share and scale for many business lines within our broker-dealer, as well as our deposit market share in Dallas/Fort Worth.”

Southwest Securities Inc. has 150 broker-dealer and registered investment adviser clearing and custody clients. It also has 167 employee registered representatives, mostly in Texas and Oklahoma.

SWS Financial Services Inc. is the independent contractor arm of the company, with 297 registered reps.

The merger is expected to be completed prior to the end of the year, the two companies said in a statement.

Although activity has been quiet of late, M&A activity for independent broker-dealers 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.

0
Comments

What do you think?

View comments

Recommended for you

Featured video

Events

The power of automation

With good data and great workflow processes, advisers can outpace the competition. Junxure's Robert DeFrancis offers some strategies for success.

Latest news & opinion

Meet our 2017 Women to Watch

Introducing 20 female financial advisers and industry executives who are distinguished leaders, advancing the business of providing advice through their creativity and hard work.

Raymond James executives call on industry to keep broker protocol

Also ask firms to pay for the administration of the protocol to 'ensure its longevity and relevance.'

Senate committee approves tax plan but full passage not assured

Several Republican senators expressed reservations about the bill, and the GOP cannot afford too many defections.

House passes tax bill, focus turns to Senate

Tax reform legislation expected to have more of a challenge in upper chamber.

SEC enforcement of advisers drops in Trump era

The agency pursued 82 cases against advisers and firms in fiscal year 2017, down from 98 the previous year.

X

Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print