Cetera Financial Group close to announcing its acquisition by private equity

Cetera Financial Group close to announcing its acquisition by private equity
Details of sale to one or more P-E firms could be announced as early as today.
JUL 17, 2018

Cetera Financial Group is close to announcing that it will be acquired by a private equity buyer or group of buyers, according to industry sources, with the company potentially revealing the details as early as 5 p.m. today. The buyers and price tag for Cetera, a network of six broker-dealers with close to 8,000 reps and advisers, were not yet known by mid-day on Tuesday, according to those sources. Bloomberg News reported in February that Cetera was exploring a sale that could fetch a price of $1.5 billion. Cetera later said that it was in the process of a review of its capital structure. The company is expecting to make an announcement about that review today at 5 p.m., according to a company spokesman, Joseph Kuo. Meanwhile, LPL Financial and Lightyear Capital, the owner of Advisor Group, are out of the running to acquire Cetera Financial Group, according to industry sources. In May, InvestmentNews reported that both had signed a confidential nondisclosure agreement that gave them access to Cetera's proprietary information in order to perform due diligence for a possible merger. Jeff Mochal, a spokesman for LPL, did not return a call on Tuesday morning to comment. Donald Marron, chairman and founder of Lightyear, also did not return a call to comment. Cetera's former parent company, RCS Capital Corp., filed a prearranged Chapter 11 bankruptcy reorganization in 2016. Cetera Financial Group is now owned by RCS Capital's former first and second lien holders, including private-equity firms Fortress Investment Group and Carlyle Investment Management, as well as money manager Eaton Vance. The six firms that make up Cetera's independent broker-dealer network are: Cetera Advisor Networks, Cetera Advisors, Cetera Financial Institutions, Cetera Financial Specialists, First Allied Securities and Summit Financial Services Group.

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