Raymond James Financial Buys Morgan KeeganPosted by in Blog on January 18, 2012
Raymond James Financial is on the rise. OnWallStreet.com reports that the company is purchasing the Morgan Keegan brokerage from Regions Financial for $930 million. This deal, experts say, could make Raymond James Financial, a St. Petersburg-based company, one of the largest financial advisory firms outside of Wall Street. Raymond James said it would keep Morgan Keegan’s Memphis-based offices in that location.
Regions Financial is expected to net not just the $930 million stock deal, but a $250 million dividend from Raymond James for the purchase. In return, Regions will indemnify Raymond James for approximately $210 million in legal costs for Morgan Keegan. The firm faces lawsuits related to bonds it sold during the financial crisis.
OnWallStreet.com says that Morgan Keegan has close to $1 billion in revenue, and has at least a $700 million book value. When the company becomes part of Raymond James, the total number of advisors for the latter firm will increase to 6,000. In order to keep those advisors in the fold, Raymond James will pay retention bonuses.
“The anticipated retention amounts paid to FA’s will be very fair and the Morgan Keegan management team expects very high retention,” Dennis Zank, Raymond James’ COO, said in a statement to the media.
The deal is expected to close by March 30.
Written by Lisa Swan