Diversified financial services firm B. Riley Financial has agreed to buy New York-headquartered investment banking and asset management firm National Holdings (NHLD) for $3.25 a share in cash.
NHLD offers financial advisory, investment banking, institutional sales and trading, equity research, financial planning, market making, tax preparation and insurance services. It serves corporations, institutions, HNWIs as well as retail investors.
It operates through a number of subsidiaries with a presence in 141 locations across 23 states and around 1,000 affiliated personnel.
Riley currently holds 45% of the company’s common stock.
The deal has already been cleared by the respective boards of both the companies and is expected to complete during the first quarter of this year. It currently awaits regulatory approvals.
The deal rationale
Riley said the combination with NHLD would immediately add to its earnings and also add over 700 registered representatives managing $18.9bn in client assets.
Moreover, the deal is expected to bolster complementary investment banking, capital markets and wealth management businesses for both the companies. It is also expected to enhance the combined platform’s episodic and recurring results.
Riley chairman and Co-CEO Bryant Riley noted that NHLD significantly expands the company’s retail channel with the addition of hundreds of advisers, and more than doubles its existing AUM.
The addition of NHLD’s network of registered representatives is said to offer additional retail distribution opportunities for its B. Riley Securities affiliate, an investment bank and small- and mid-cap capital markets franchise.
Speaking on the development, NHLD chairman and CEO Michael Mullen said: “This combination is the right next step in our evolution. Our core focus will remain on servicing our clients and we will continue to intelligently scale our business for the benefit of both firms’ clients and shareholders.
“This combination affords our firms’ expanded network of financial professionals with access to differentiated solutions, robust equity research and enhanced sales and trading capabilities, in addition to a wide array of customised corporate finance and business advisory solutions.”
Last year, B. Riley invested in IQvestment Holdings, a fintech company that provides a B2B e-commerce platform.