Barclays PLC BCS has completed the sale of its U.S. Wealth & Investment Management unit to St. Louis-based Stifel Financial Corp. SF, announced in June 2015. While no financial details were disclosed, Barclays does not expect the deal to have a significant impact on its financials.
As per the deal, all of Barclays Wealth & Investment Management clients – including Barclays Wealth Trustees (U.S.) N.A. – will be served by Stifel Financial. Additionally, Barclays appointed Stifel as its private wealth distribution partner for some of its equities and credit new issue securities.
The Wealth & Investment Management unit includes Lehman Brothers’ brokerage arm, which Barclays had purchased in 2008. The business was involved in various disputes over the past few years, which compelled Barclays to look for prospective buyers. However, Barclays and Lehman reached a $1.28 billion settlement centered on certain marginal assets, and promised to drop all current and prospective charges against each other.
According to Akshaya Bhargava, Chief Executive of Global Wealth and Investment Management at Barclays, “Barclays is pleased to have completed the transaction which brings our U.S. investment representatives under the Stifel banner. We look forward to our continuing collaboration through our distribution agreement.”
The deal will help Barclays shed its non-core units, while strengthening Stifel’s wealth management business. With similar deals in the pipeline, including an anticipated exit from the U.S. legacy bond market, Barclays is right on track to focus on more rewarding lines of business, and thereby, regain its profitability.
On the other side, the acquisition seems to be in sync with Stifel Financial’s focus on expansionary growth. Notably, the investment broker has been on an acquisition spree since the past few quarters. In November, the company disclosed that it has inked a deal to acquire Connecticut-based Eaton Partners, LLC, a global fund placement and advisory firm, while in March, news of Stifel Financial acquiring the securities division of U.K.-based investment firm Charles Stanley Group hit the markets. Prior to that, in November 2014, the company announced the acquisition of Montgomery-based Merchant Capital, LLC.
Currently, Barclays has a Zacks Rank #3 (Hold), while Stifel Financial carries a Zacks Rank #4 (Sell). Other stocks in the finance space worth considering include KCG Holdings, Inc. KCG and Arlington Asset Investment Corp. AI. Both these stocks sport a Zacks Rank #2 (Buy).
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