Ladenburg Thalmann to Buy Securities America

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Ladenburg Thalmann Financial Services Inc. has agreed to buy Securities America Financial Corp., the troubled independent broker/dealer, from Ameriprise Financial Inc. for at least $150 million in cash, Ladenburg and Ameriprise said this morning. Registered Rep. was the first to write about Ladenburg as a potential buyer of Securities America.

Ameriprise said in April it would sell Securities America after the IBD was pounded by litigation over its sale of allegedly fraudulent private placements from Medical Capital Holdings and Provident Royalties. The firm negotiated a $150 million settlement with investors earlier this year.

Securities America has about 1,700 financial advisors and $50 billion in client assets, but some advisors have recently defected, joining LPL Financial, for example. Publicly-traded Ladenburg Thalmann is the parent company of Triad Advisors and Investacorp. Ladenburg said Securities America’s Chief Executive Officer Jim Nagengast and the company’s senior management team will continue to run Securities America as a stand-alone business at its headquarters in La Vista, Neb.

“The acquisition of Securities America is a transformative transaction for Ladenburg, enabling us to immediately bolster our position in the vibrant independent broker-dealer space and provide a platform for future growth,” Phillip Frost, Ladenburg’s chairman and principal shareholder, said in a release. “This strategic combination is consistent with Ladenburg’s long-stated goal to grow into a more diversified financial services firm with a stable, growing revenue stream from our independent broker-dealer business to balance our capital markets and investment banking areas.”

Ladenburg President and CEO Richard Lampen said that the combined company would have had approximately $675 million in revenue based on the trailing 12-month period. Ladenburg and Securities America will have combined about 2,700 independent financial advisors and about $70 billion in total client assets.

Ameriprise may collect potential future payments in addition to the $150 million purchase price if Securities America meets certain financial criteria in 2012 and 2013.

Ameriprise said it hopes to close the deal by the end of this year, subject to regulatory approval. Ladenburg said approval by its shareholders will not be required. An affiliate of Frost’s will finance the acquisition.