Ladenburg Thalmann Financial Services Inc. continued to expand in size and geography on Monday by purchasing independent broker-dealer KMS Financial Services Inc. in a $24 million deal.
The acquisition, which consists of cash, notes and stocks, gives the Miami-based Ladenburg a foothold in Seattle, where KMS is located. The company, with 325 financial advisers and $14 billion in assets under management, will keep its corporate leaders and operate as a stand-alone enterprise at its current headquarters.
Ladenburg chairman and chief executive Richard Lampen said his firm was attracted to KMS because of its operating characteristics, such as a high level of assets under management and recurring revenue, its culture, highlighted by a “quality management team,” and its location.
“They'll fit perfectly in our system of independent broker-dealers working under their existing management,” Mr. Lampen said. “This will give us a much more significant presence in [the Northwest] region. The transaction is part of our ongoing strategy to position ourselves as one of the leaders in the independent broker-dealer space.”
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The KMS purchase marks another move in the recent buying spree by Ladenburg and its subsidiaries. Earlier this month, Ladenburg
acquired insurance broker Highland Capital for $42 million. In July, Securities America Inc., a Ladenburg subsidiary,
bought certain assets of Sunset Financial Services Inc., a broker-dealer owned by Kansas City Life Insurance Co.
Following the acquisition activity, Ladenburg has 3,500 financial advisers with $110 billion in assets under management and annual revenues of approximately $1 billion across its collection of independent brokers and financial advisory firms. In addition to Securities America, other Ladenburg subsidiaries include Triad Advisors and Investacorp.
Ladenburg's “deliberate, prudent” acquisition of those firms was reassuring to Mark Hamby, chairman and chief executive of KMS, he said.
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KMS had been independently owned and operated for more than 40 years and cherished that autonomy, Mr. Hamby said. Under Ladenburg, it can maintain its management, advisers and custodians, but it can also benefit from Ladenburg's “differentiated products” and its technological muscle.
“It is a great answer for the continued development of our firm off into the future,” Mr. Hamby said.
Acquisitions
have dotted the independent broker-dealer landscape for months, a trend that Mr. Lampen sees continuing.
“The independent broker-dealer business is really one of the most vibrant growth opportunities in the financial services industry,” he said.
