The latest wealth management merger and acquisition transactions in North America.

LPL Financial
Investment advisory firm and independent broker/dealer LPL Financial has agreed to acquire the assets of EK Riley Investments, a broker-dealer and registered investment advisor headquartered in Seattle. 

EK Riley Investments serves individuals, affluent families, and business owners. It has about 35 financial advisors and $2 billion of client assets under management.

The transaction is structured as an asset purchase and is expected to close in the second half of 2020.  The asset purchase agreement provides for both a payment at closing and potential contingent payments. LPL estimates a transaction multiple of approximately 6x post-synergy EBITDA.

Stratos Wealth Enterprises
Stratos Wealth Enterprises, part of the Stratos Wealth Network company that oversees $13.9 billion in assets, has made a strategic investment in Brown Wealth Management. 

Brown Wealth Management, based in San Diego, California, has more than $600 million in advisory AuM. Founded in 1996, it has five wealth advisors and four firm operations specialists.

"We view the partnership with BWM as a major component of our growth in the SoCal market. We believe that the combination of BWM's process driven approach and Stratos' scale will drive growth locally and beyond,” Lou Camacho, president of Stratos Wealth Enterprises, said in a statement late last week. 

Stratos companies include Stratos Wealth Partners, Stratos Wealth Advisors, Stratos Wealth Management, Stratos Wealth Enterprises, and Fundamentum. Stratos includes a national network of 300 financial advisors and financial planning practitioners working across 87 offices throughout the US. It is based in Beachwood, Ohio.

Warburg Pincus, Tinley Smith & Williamson
US-based private equity house Warburg Pincus has jumped into the merger of UK-based wealth management firms Tilney and Smith & Williamson, investing into the new entity and significantly cutting its debt burden.

Under the agreement, the combined organization will be known as Tilney Smith & Williamson. Funds advised by Warburg Pincus will co-invest in the combined business alongside funds advised by Permira.  
The revised deal will provide a “significant reduction in external debt for the combined group”, as well as reduced ongoing financing costs and an improved regulatory capital position, the statement from the businesses today said.

“The new investment by Warburg Pincus, particularly in the midst of a global health and economic crisis, represents a significant vote of confidence in the strength of a combination of Tilney and Smith & Williamson and adds further credibility to the firm’s longer-term strategy,” the statement said. 

Warburg Pincus has already invested in a number of financial businesses around the world and including in the US: Tilney Smith & Williamson will be Warburg Pincus’s sixth investment in a wealth management company.

AGF, Smith & Williamson’s largest shareholder, will now fully exit its investment in the group upon completion of the transaction. The overall transaction value for individual Smith & Williamson shareholders will be the same as under the original agreement. As before, Smith & Williamson’s management will be rolling the majority of their investment into the equity of the combined group.

Subject to regulatory and anti-trust consent and the approval of Smith & Williamson’s shareholders, it is expected that completion will take place in the second half of 2020, the statement said.