Deadline set for broker-dealer merger with SPAC

The deal between broker-dealer aggregator Wentworth and Kingswood SPAC must be completed by late November.

It’s put up or shut up time for the merger between a buyer of small to midsize broker-dealers, Wentworth Management Services, and a special purpose acquisition company, or SPAC, called Kingswood Acquisition Corp., with the deadline for the deal to be completed now set for late November, according to a filing Monday with the Securities and Exchange Commission.

If the merger is not consummated by Nov. 24, the Friday after Thanksgiving this year, investors in the Kingswood SPAC will have their money returned, a common practice at so-called blank-check companies that never complete a deal. The deadline was extended from Aug. 24, according to the filing.

“Like many blank check companies, our charter provides for the return of the funds held in trust to the holders of common stock sold in our IPO if there is no qualifying business combination [or combinations] consummated on or before a certain date, in our case, November 24, 2023,” according to the filing.

Shares of Kingswood Acquisition Corp., with the ticker KWAC, hit a new 52-week high of $12 in trading Tuesday.

Kingswood Acquisition Corp. had its initial public offering in November 2020, right in the middle of the SPAC craze during the Covid-19 pandemic. The company sold warrants and shares generating $115 million. Last summer, Wentworth and Kingswood announced their plans for a merger.

Wentworth Management Services is owned by Alexander Chiam Markowits, who also owns a string of nursing homes.

Markowits created the broker-dealer aggregator in 2016 and bought Purshe Kaplan Sterling Investments at the end of 2017. It was his first deal for a brokerage firm, and was followed by a few others: Cabot Lodge Securities, World Equity Group Inc. and Broadstone Securities.

According to an investor presentation filed with the SEC in December, the Wentworth Management network has 1,900 reps and advisers and $25 billion in assets under management. In 2021, it generated $187 million in revenue and $9.1 million in pro forma adjusted earnings before interest, taxes, depreciation and amortization.

This winter, broker-dealer veteran Larry Roth was tapped to be executive chairman of the enterprise, which is to be dubbed Binah Capital Group Inc. when the deal closes in the next few months.

Roth declined to comment about the revised deadline for the merger when reached Tuesday afternoon.

Last month, registered investment advisor and hedge fund Owl Creek Asset Management bought a 10.1% stake in Kingswood Acquisition Corp., or 60,600 shares. Jeffrey Altman, founding partner and chief portfolio manager at the firm, which has $3.4 billion in client assets, did not return a call Tuesday morning to comment about Kingswood.

Skyview Investment Advisors, with $5.7 billion in client assets, owns 12.5% of Kingswood’s outstanding shares. Steven Turi, managing partner at Skyview, did not return a call Tuesday to comment.