Shares of Stifel Financial Corp. (SF) closed higher at the end of yesterday’s trading session following the company’s announcement of a deal to acquire Montgomery-based Merchant Capital, LLC. The terms and conditions of the deal were, however, not disclosed.
This transaction, which marks the investment brokerage firm’s third public finance acquisition, is expected to be completed in December this year. Moreover, the deal received green signal from all the senior members of Merchant Capital.
Merchant Capital, an investment bank specializing in public finance, is active and well-established in the Southeastern market. Merchant Capital’s expertise will help enhance Stifel’s position in the Southeastern underwriting markets.
Stifel recently completed the acquisition of Legg Mason Inc.’s (LM) unit – 1919 Investment Counsel & Trust Company, N.A. Further, the company acquired London-based stock broking and investment banking firm Oriel Securities in Jul 2014.
Stifel’s previous two public finance acquisition deals include the purchase of California-based public finance investment banking boutique – De La Rosa & Co in Apr 2014 as well as the acquisition of a leading financial services firm Stone & Youngberg LLC in 2011.
The company seems to be on an acquisition spree and the latest deal is in sync with its expansion strategy.
Stifel has been benefiting from its past acquisitions too. For the three month period ended Sep 30, 2014, the company’s net revenue improved 9.4% year over year. Further, Stifel, with its solid business model and strategic acquisitions, is well poised for growth.
Currently, Stifel has a Zacks Rank #3 (Hold). Some better-ranked investment brokerage firms worth considering include FXCM Inc. (FXCM) and Piper Jaffray Companies (PJC). Both these stocks sport a Zacks Rank #1 (Strong Buy).
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