Dallas RIAs combine to make $500M firm serving pilots

Dallas-based RIA Smith Anglin Financial LLC completed its acquisition of Rhoads Lucca Capital Management Inc. today in a deal that creates a $500 million firm designed to offer a “one-stop shop” for commercial airline pilots. The combined firms work with pilots from Southwest Airlines Co., United Airlines Inc., Delta Air Lines Inc., AMR Corp's American Airlines Inc. and U.S. Airways Group Inc., and FedEx Corp., among others. “We’re in the same niche market, but we complement each other very well,” said Steve Anglin, managing partner at Smith Anglin, in an interview. “One of the reason Rhoads Lucca is very attractive to us is they have a presence with certain airlines where we don’t.” Rhoads Lucca took more than a year to find the right partner and complete the deal, according to a news release from the two firms. Smith Anglin was selected out of a group of 10 regional and national registered investment advisers. “We outlined a set of criteria that was challenging, to put it mildly,” John Rhoads, a partner at Rhoads Lucca, said in the release. “And frankly, the choice we made in the end would have appealed to me even if I planned on remaining with the business for another 10 years, versus retiring in one.” Rhoads Lucca used mergers-and-acquisitions adviser David Selig, chief executive of Advice Dynamics Partners LLC, to broker the deal. “Mr. Selig did a good job of keeping us on target,” Mr. Anglin said. “When we strayed, he knew how to bring us back together.” Key considerations of the deal included the retention of all Rhoads Lucca employees, the succession goals of the sellers, and the understanding of the airline pilot market and aviation industry. The deal marks Smith Anglin's first acquisition, and the firm will be “opportunistic” in considering future deals, according to the release. “Expansion is a viable way to hit our growth goals,” Mr. Anglin said, describing the merger process as surprisingly smooth. “The chase, the acquisition, the close — it’s all been an experience.”