Advisor
Group, one of the nation's largest networks of independent wealth management
firms, and Ladenburg Thalmann Financial Services Inc., a publicly-traded
diversified financial services company, today announced that both companies
have entered into a definitive merger agreement to join the two companies.
Under
the terms of the transaction, Ladenburg has agreed to be acquired by Advisor
Group through a cash merger, in which each outstanding share of Ladenburg's
common stock will be converted into a cash payment of $3.50 per share.
The total enterprise value of the transaction is approximately $1.3 billion,
taking into account Ladenburg's common stock, preferred stock and outstanding debt.
The definitive merger agreement and the transactions contemplated were
unanimously approved by Ladenburg's Board of Directors.
The
transaction, which is subject to customary closing conditions, including the
approval of Ladenburg's shareholders, and receipt of required regulatory
clearances and approvals, is expected to close in the first half of 2020.
Following
the completion of this transaction, the expanded Advisor Group organization
will continue to be led by its current CEO and President, Jamie Price. When
the transaction is completed, Advisor Group's leadership team will include
senior executives from both Advisor Group and Ladenburg. Ladenburg's
firms will not be merged with Advisor Group's firms, reflecting both companies'
commitment to a multi-brand network model.
Advisor
Group's network of firms consists of FSC Securities Corporation, Royal Alliance
Associates, SagePoint Financial and Woodbury Financial. Ladenburg's
independent advisory and brokerage firms include Securities America, Triad
Advisors, Investacorp, KMS Financial Services and Securities Service Network
(SSN).
Additional
Ladenburg subsidiaries include Highland Capital Brokerage, a leading insurance
solutions brokerage; Premier Trust, a financial advisor-focused trust services
company; and Ladenburg Thalmann & Co., a middle market investment
bank. Each of these subsidiaries has played a role in delivering unique,
value-add solutions to Ladenburg-affiliated financial advisors.
Ladenburg
Thalmann Chairman, President and CEO Richard Lampen said, "This is a
transaction that maximizes value for our shareholders, while positioning our
financial advisors for continued growth and success. We have always been
impressed with Advisor Group's platform, offerings and leadership. Advisor
Group's CEO, Jamie Price, and his management team offer a mature shared
services model and a demonstrated ability to innovate and invest in ways that
help advisors grow. We are confident this transaction will help our
advisors accelerate the growth of their businesses, while enabling them to
benefit from the highly personalized service experience they have always
enjoyed, under a very similar multi-custodial, multi-clearing and multi-brand
structure."
Advisor
Group President and CEO Jamie Price said, "This acquisition brings
together the best of two industry leaders, to the benefit of the financial
advisors we collectively serve. We believe that the investments necessary
for competitively differentiated technology, practice management, products and
service excellence require a greater level of scale than either of our
companies can achieve on a stand-alone basis. In fact, as our two
organizations learned more about each other's platforms, it became obvious that
our strengths rounded out each other's offerings, and combined, we will have
one of the most comprehensive and best-in-class platforms for financial
advisors in the industry. Equally important, Advisor Group and Ladenburg
have a shared commitment to the flexibility of third-party clearing, together
with maintaining a 'small firm feel' delivered through the distinct management
teams and cultures of a multi-brand network model. In today's
fast-consolidating marketplace, where advisors fear becoming just another
number in the crowd, the more intimate service culture and sense of community
that our multi-brand approach offers is increasingly in demand."
Milton
Berlinski, Co-Founder and Managing Partner of Reverence Capital Partners, a
leading financial services-focused private equity firm and majority equity
owner of Advisor Group, said, "Ladenburg Thalmann and Advisor Group
are highly complementary businesses, with nationwide footprints, technology
capabilities and senior management talent that represent the best of what the
wealth management industry has to offer for financial advisors and their
clients. By combining these two firms, we have created one of the most robust
platforms in the country to support advisors' growth, with the scale, resources
and intellectual capital to position them for success, no matter their business
model or client focus."
Giving
Advisors the Best of the Best in Platforms, Tools and Expertise
Following
the completion of this transaction, Advisor Group will continue to operate
under a multi-brand network model of firms, enabling the delivery of
industry-leading tools and expertise through distinct firms with unique brands
that each offer a sense of community and personalized service for affiliated
financial advisors.
Financial
advisors affiliated with Ladenburg's subsidiary firms are expected to benefit
from Advisor Group's recent investments in cutting-edge enterprise-level
service offerings, including eQuipt, the firm's fully-digital client onboarding
system; MyCMO, its personalized advisor marketing platform; MySuccessionPlan.com,
its suite of bundled succession planning resources; and its integrated
CyberGuard Program for cybersecurity.
For
advisors affiliated with Advisor Group, the transaction brings access to
Ladenburg Thalmann's industry-leading practice management capabilities, wealth
management resources, advisor-client portal technologies and expanded national
scale.
The two
companies also feature strong cultural similarities, including a shared
commitment to supporting greater diversity across the industry, including
advancing career opportunities for women financial advisors and women
executives, as evidenced by Advisor Group's Women Forward initiative and the
Ladenburg Institute of Women & Finance.
Multi-Custodial,
Multi-Clearing Approach Minimizes Disruption and Maximizes Flexibility;
Positions Company for Future Leadership in RIA Segment
Upon
the transaction's completion, Advisor Group will be one of the industry's
leading providers of a multi-custodial, multi-clearing model that drives
maximum choice and flexibility for financial advisors.
Because
both Advisor Group and Ladenburg use Pershing and National Financial (part of
Fidelity Custody & Clearing Solutions) as their largest clearing providers,
no repapering of client accounts will be necessary in connection with this
transaction and its closing.
As one
of the largest multi-custodial and multi-clearing networks of firms in the
country, the company will be even better positioned to redefine the RIA segment
of the wealth management space. The combined company will be able to
support all financial advisor business models, including the hybrid advisor
doing both securities and advisory business, as well as the "investment
advisor only" professional who is either utilizing a corporate RIA
platform, or has an independent RIA.
Adam
Malamed, Executive Vice President and Chief Operating Officer of Ladenburg,
said, "The ongoing evolution of our industry validates the importance of
Ladenburg and Advisor Group's respective roles as the leading innovators of the
network model of firms approach within our industry. The appeal of
bringing Ladenburg and Advisor Group together is driven in large part by our
shared vision for driving a transformative and innovative approach to the
wealth management space. For example, among the many advantages of our
multi-custodial, multi-clearing capabilities are the expertise and leadership
we can further build in the RIA space. The combination of Ladenburg and Advisor
Group creates a unique offering for financial advisors who are primarily
fee-based, or fee-only, whether they want to have their own RIA under a turnkey
level of back and middle office support, or would prefer to do fee-only work
through a corporate RIA, without having to also hold securities licenses on the
brokerage side of our industry."
Financial
and Legal Advisors to the Transaction
Jefferies
LLC is acting as financial advisor to Ladenburg, with Sullivan & Cromwell
LLP serving as Ladenburg's legal counsel. Eversheds Sutherland, Kirkland &
Ellis LLP, and Greenberg Traurig LLP are serving as legal counsel to Advisor
Group and Reverence Capital.
Committed
financing for this transaction has been provided by Bank of America, UBS
Securities, Barclays, Deutsche Bank Securities and Goldman, Sachs & Co.
About
Advisor Group
Advisor Group, Inc. is one of the nation's largest networks of independent financial advisors serving over 7,000 advisors and overseeing $271 billion in client assets. Headquartered in Phoenix, AZ, the firm is mission-driven to support the heroic role that advisors can play in the lives of their clients, offering securities and investment advisory services through its subsidiaries FSC Securities Corp., Royal Alliance Associates Inc., SagePoint Financial, Inc. and Woodbury Financial Services, Inc., as broker/dealers, registered investment advisors and members of FINRA and SIPC. Cultivating a spirit of entrepreneurship and independence, Advisor Group champions the enduring value of financial advisors and is committed to being in their corner every step of the way. For more information visit https://www.advisorgroup.com.
Advisor Group, Inc. is one of the nation's largest networks of independent financial advisors serving over 7,000 advisors and overseeing $271 billion in client assets. Headquartered in Phoenix, AZ, the firm is mission-driven to support the heroic role that advisors can play in the lives of their clients, offering securities and investment advisory services through its subsidiaries FSC Securities Corp., Royal Alliance Associates Inc., SagePoint Financial, Inc. and Woodbury Financial Services, Inc., as broker/dealers, registered investment advisors and members of FINRA and SIPC. Cultivating a spirit of entrepreneurship and independence, Advisor Group champions the enduring value of financial advisors and is committed to being in their corner every step of the way. For more information visit https://www.advisorgroup.com.
About
Ladenburg Thalmann
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA, LTSL, LTSF, LTSK, LTSH) is a publicly-traded diversified financial services company based in Miami, Florida. Ladenburg's subsidiaries include industry-leading independent advisory and brokerage (IAB) firms Securities America, Triad Advisors, Securities Service Network, Investacorp and KMS Financial Services, as well as Premier Trust, Ladenburg Thalmann Asset Management, Highland Capital Brokerage, a leading independent life insurance brokerage company and full-service annuity processing and marketing company, and Ladenburg Thalmann & Co. Inc., an investment bank which has been a member of the New York Stock Exchange for over 135 years. The company is committed to investing in the growth of its subsidiaries while respecting and maintaining their individual business identities, cultures, and leadership. For more information, please visit www.ladenburg.com.
Ladenburg Thalmann Financial Services Inc. (NYSE American: LTS, LTS PrA, LTSL, LTSF, LTSK, LTSH) is a publicly-traded diversified financial services company based in Miami, Florida. Ladenburg's subsidiaries include industry-leading independent advisory and brokerage (IAB) firms Securities America, Triad Advisors, Securities Service Network, Investacorp and KMS Financial Services, as well as Premier Trust, Ladenburg Thalmann Asset Management, Highland Capital Brokerage, a leading independent life insurance brokerage company and full-service annuity processing and marketing company, and Ladenburg Thalmann & Co. Inc., an investment bank which has been a member of the New York Stock Exchange for over 135 years. The company is committed to investing in the growth of its subsidiaries while respecting and maintaining their individual business identities, cultures, and leadership. For more information, please visit www.ladenburg.com.
About
Reverence Capital Partners
Reverence Capital Partners is a private investment firm focused on thematic investing in leading global, middle-market Financial Services businesses through control and influence oriented investments in 5 sectors: (1) Depositories and Finance Companies, (2) Asset and Wealth Management, (3) Insurance, (4) Capital Markets and (5) Financial Technology/Payments. The firm was founded in 2013, by Milton Berlinski, Peter Aberg and Alex Chulack, after distinguished careers advising and investing in a broad array of financial services businesses. The Partners collectively bring over 90 years of advisory and investing experience across a wide range of financial services sectors. For more information visit www.reverencecapital.com.
Reverence Capital Partners is a private investment firm focused on thematic investing in leading global, middle-market Financial Services businesses through control and influence oriented investments in 5 sectors: (1) Depositories and Finance Companies, (2) Asset and Wealth Management, (3) Insurance, (4) Capital Markets and (5) Financial Technology/Payments. The firm was founded in 2013, by Milton Berlinski, Peter Aberg and Alex Chulack, after distinguished careers advising and investing in a broad array of financial services businesses. The Partners collectively bring over 90 years of advisory and investing experience across a wide range of financial services sectors. For more information visit www.reverencecapital.com.
Additional
Information and Where to Find It
This
press release may be deemed to be solicitation material in respect of the
proposed merger between Ladenburg Thalmann Financial Services Inc. ("Ladenburg")
and Harvest Merger Sub, Inc. ("Merger Sub"), a wholly owned
subsidiary of Advisor Group Holdings, Inc. ("Advisor Group"),
and other transactions (collectively, the "Transaction")
contemplated by the Agreement and Plan of Merger, dated as of November 11, 2019
(the "Merger Agreement"), by and among Ladenburg, Advisor
Group and Merger Sub. In connection with the Transaction, Ladenburg intends to
file relevant materials with the Securities and Exchange Commission (the "SEC"),
including a proxy statement on Schedule 14A. INVESTORS AND SHAREHOLDERS
OF LADENBURG ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH THE SEC,
INCLUDING LADENBURG'S PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION
ABOUT THE PROPOSED TRANSACTION. Investors and shareholders will be
able to obtain copies of the documents, when filed, free of charge at the SEC's
website (http://www.sec.gov).
Investors and shareholders may also obtain copies of documents filed by
Ladenburg with the SEC by contacting Ladenburg at Investor Relations, Ladenburg
Thalmann Financial Services, Inc., 4400 Biscayne Boulevard, 12th Floor, Miami,
Florida 33137, by email at CorporateRelations@ladenburg.com,
or by visiting Ladenburg's website (http://ir.stockpr.com/ladenburg).
Participants
in Solicitation
Ladenburg
and its directors, executive officers and other members of management and
employees may be deemed to be participants in the solicitation of proxies from
the holders of Ladenburg Common Stock in connection with the proposed
Transaction. Information about Ladenburg's directors and executive officers is
available in Ladenburg's proxy statement for its 2019 Annual Meeting of
Shareholders, which was filed with the SEC on April 30, 2019. Other information
regarding the participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise, will be
contained in the proxy statement and other relevant materials to be filed with
the SEC regarding the proposed Transaction when they become available.
Investors and shareholders should read the proxy statement carefully when it
becomes available before making any investment or voting decisions.
Forward-looking
Statements
This
press release contains forward-looking statements. You can generally identify
forward-looking statements by the use of forward-looking terminology such as
"anticipate," "believe," "continue,"
"could," "estimate," "expect,"
"explore," "evaluate," "intend," "may,"
"might," "plan," "potential,"
"predict," "project," "seek," "should,"
or "will," or the negative thereof or other variations thereon or
comparable terminology. These forward-looking statements are only predictions
and involve known and unknown risks and uncertainties, many of which are beyond
Ladenburg's and Advisor Group's control. Statements in this document regarding
Ladenburg and Advisor Group that are forward-looking, including, without
limitation, projections as to the anticipated benefits of the proposed
Transaction and the closing date for the proposed Transaction, are based on
management's estimates, assumptions and projections, and are subject to
significant uncertainties and other factors, many of which are beyond the
control of Ladenburg and Advisor Group. Important risk factors could cause
actual future results and other future events to differ materially from those
currently estimated, including, but not limited to: (i) the timing to
consummate the proposed Transaction; (ii) the risk that a condition to closing
of the proposed Transaction may not be satisfied and the Transaction may not
close; (iii) the risk that a regulatory approval that may be required for the
proposed Transaction is delayed, is not obtained or is obtained subject to
conditions that are not anticipated; (iv) the risk that a sufficient number of
shares of Ladenburg Common Stock are not voted in favor of the proposed
Transaction; (v) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement; (vi) the effect of
the announcement or pendency of the Transaction on Ladenburg's business
relationships, operating results, and business generally; (vii) risks that the
proposed Transaction disrupts current operations of Ladenburg and potential
difficulties in Ladenburg employee retention as a result of the Transaction;
(viii) risks related to diverting management's attention from Ladenburg's
ongoing business operations; (ix) the outcome of any legal proceedings that may
be instituted against Ladenburg related to the Merger Agreement or the
Transaction; and (x) the amount of the costs, fees, expenses and other charges
related to the Transaction. The list above is not exhaustive. Because forward
looking statements involve risks and uncertainties, the actual results and
performance of Ladenburg may materially differ from the results expressed or
implied by such statements. Given these uncertainties, readers are cautioned
not to place undue reliance on such forward-looking statements. Unless
otherwise required by law, Ladenburg also disclaims any obligation to update
its view of any such risks or uncertainties or to announce publicly the result
of any revisions to the forward-looking statements made herein.
Readers
should carefully review the risks and uncertainties disclosed in Ladenburg's
reports with the SEC, including those set forth in Part I, "Item 1A. Risk
Factors" in Ladenburg's Annual Report on Form 10-K for the fiscal year
ended December 31, 2018 and in subsequent Quarterly Reports on Form 10-Q and
other reports or documents Ladenburg files with, or furnishes to, the SEC from
time to time. Except as specifically noted, information on, or accessible from,
any website to which this press release contains a hyperlink is not
incorporated by reference into this press release and does not constitute a
part of this press release. No assurances can be given that any of the events
anticipated by the forward-looking statements will transpire or occur, or if
any of them do occur, what impact they will have on the results of operations
or financial condition of Ladenburg or Advisor Group. All forward-looking
statement in this communication are qualified in their entirety by this
cautionary statement
*Assets
as of September 30, 2019
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