Schorsch snaps up Cetera for $1.15B

In a head-turning move, newcomer to the independent broker-dealer industry Nicholas Schorsch is pulling off the largest independent-broker-dealer acquisition in years, with a cash deal to buy Cetera Financial Group.
MAY 21, 2014
In a head-turning move, newcomer to the independent broker-dealer industry Nicholas Schorsch is pulling off the largest independent-broker-dealer acquisition in years. His broker-dealer holding company, RCS Capital Corp., announced Thursday that he intends to buy Cetera Financial Group Inc., a leading network of four broker-dealers and 6,600 registered representatives and financial advisers, from Lightyear Capital. The cash deal is worth $1.15 billion, according a statement released by RCS Capital. Mr. Schorsch is starting off 2014 right where he left off last year, when he completed the acquisition of one broker-dealer holding company, First Allied Securities Inc., and announced two others, Investors Capital Holdings Inc. and Summit Financial Services Group Inc. Once those three firms and the four Cetera broker-dealers are under Mr. Schorsch's roof, he will have 9,000 reps and advisers producing about $1.4 billion in annual revenue. A Cetera acquisition would make his broker-dealer holdings either the third- or fourth-largest network of independent reps and advisers. Mr. Schorsch isn't afraid to ruffle feathers in the financial services industry. Over the past five years, he has turned the nontraded real estate investment trust industry on its ear, speeding up the return of capital to investors to the delight of many investment advisers. With dozens of independent broker-dealers as outlets, American Realty Capital, his real estate company, was the biggest seller of nontraded REITs and nontraded business development companies over the past two years. ARC raised $2.8 billion in equity in 2012 and $8.3 billion in 2013, far outpacing the competition. Last year, Mr. Schorsch made a pivot away from producing new nontraded REITs and began buying broker-dealers and other financial services companies. Finishing the pending acquisition of Cetera would complete his transition from a REIT czar to a broker-dealer leader. (Don't miss: Nick Schorsch's year-long buying binge and Schorsch snares the brass ring he missed the first time with Cole deal. Also: Cetera skyrockets into first tier.) (See Schorsch on separating the REITs from the chaff.)

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