Ladenburg Thalmann Financial Services Inc. (NYSE MKT:LTS, LTS PrA)
(“Ladenburg”) announced today that it has acquired Highland Capital
Brokerage, Inc. (“Highland”), a leading independent insurance brokerage
company that delivers life insurance, annuities and long-term care
solutions to investment and insurance providers. Highland provides
specialized point-of-sale support along with advanced marketing and
creative estate and business planning techniques, delivering customized
insurance solutions to both institutional clients and independent
producers.
Ladenburg acquired Highland for approximately $42 million. The purchase
price for the common stock of Highland was $12.7 million, consisting of
approximately $3.6 million in cash and 2,540,762 shares of Ladenburg
common stock. In addition, Ladenburg repaid Highland’s bank facility of
$22.3 million and $7 million of Highland’s promissory notes remain
outstanding.
Ladenburg Thalmann is a publicly-traded diversified financial services
company that is committed to the growth, innovation and sustainability
of businesses within the financial services industry. Its subsidiaries
include Securities America, Triad Advisors, Investacorp, Premier Trust,
Ladenburg Thalmann Asset Management and 135-year-old NYSE member
investment bank, Ladenburg Thalmann & Co. Inc. The firm has grown to
over 2,800 independent financial advisors with approximately $90 billion
in total client assets since it first entered the independent
broker-dealer space in 2007.
“The acquisition of Highland marks Ladenburg’s entrance into the
wholesale life insurance marketplace and reflects our commitment to
building a strong, diversified financial services organization,” stated
Dr. Phillip Frost, Ladenburg’s Chairman of the Board and principal
shareholder. “We are excited to welcome Highland’s management,
principals and associates to the Ladenburg Thalmann family and look
forward to their continued success.”
Highland will benefit from Ladenburg’s resources as an established
public company, supporting the subsidiary’s growth according to its
existing vision and business model. The deal will assist Highland in
hiring additional senior sales professionals, accelerating technology
and infrastructure upgrades, providing greater training and development
for its sales teams, and capitalizing on opportunities in new markets.
For the twelve months ended June 30, 2014, Highland had revenues of
approximately $46 million.
“We have tremendous respect and admiration for the business that
Highland has built and the caliber of professional that makes up their
outstanding management team and principals,” said Ladenburg President
and Chief Executive Officer Richard Lampen. “This deal reflects
Ladenburg’s confidence in Highland’s leadership in the wholesale
insurance industry based on its respected brand, exemplary point-of-sale
support, strong insurance company and client relationships, and
unwavering values and integrity. We are committed to building a
partnership with Highland’s management and principals to accelerate the
firm’s growth and amplify their culture. This acquisition marks an
important step in our expansion into this higher-margin, attractive
wholesale distribution channel.”
Highland’s CEO Jim Gelder, CLU, and his senior management team will
continue to operate Highland as a standalone business. Mr. Gelder brings
42 years of experience in the wholesale insurance business to the
Ladenburg family. Prior to joining Highland in 2013, he served as
Executive Vice President of National Financial Partners Corp. (NFP) and
CEO of NFP Insurance Services, Inc., and previously as head of the life
insurance business distribution organization for ING U.S. Financial
Services, where he was responsible for all individual retail life
insurance distribution. Highland will maintain its existing headquarters
in Birmingham, Alabama.
“Ladenburg’s commitment to preserving the management and culture of the
firms it acquires affords us the flexibility to continue operating our
business with no disruption to our firm principals, employees, clients
or customers and presents exciting opportunities for all of our
stakeholders,” Mr. Gelder said. “With the support of a publicly-traded
parent company, we will be better positioned to deliver a greater
breadth and quality of services, particularly to our institutional
clients and independent insurance producer partners.”
The Highland acquisition will give Ladenburg’s independent
advisors—affiliated through subsidiaries Securities America, Triad
Advisors and Investacorp—greater access to high-quality insurance
solutions, enhancing the products and services they can deliver to their
clients.
Graubard Miller served as legal counsel for Ladenburg in the
transaction, and Sirote & Permutt, PC served as legal counsel for
Highland.
About Ladenburg Thalmann
Ladenburg Thalmann Financial Services Inc. (NYSE MKT:LTS, LTS PrA) is a
publicly-traded diversified financial services company based in Miami,
Florida. Ladenburg’s subsidiaries include industry-leading independent
broker-dealer and advisory firms Securities America, Inc., Triad
Advisors, Inc. and Investacorp, Inc. as well as Premier Trust, Inc.,
Ladenburg Thalmann Asset Management and the 135-year-old NYSE member
investment bank, Ladenburg Thalmann & Co. Inc. The company is committed
to investing in the growth of its subsidiaries while respecting and
maintaining their individual business identities, cultures, and
leadership.
Ladenburg Thalmann’s independent brokerage and advisory network consists
of more than 2,800 financial advisors with approximately $90 billion in
total client assets. For more, information, see www.ladenburg.com.
About Highland Capital Brokerage
Committed to helping successful financial advisors and insurance
professionals to grow their business, Highland Capital Brokerage creates
trusted relationships by delivering customized insurance solutions,
personalized local service and support, and superior value. Highland has
differentiated itself among multi-carrier brokerage agencies through an
emphasis on providing value-added marketing and point-of-sale support.
Highland provides objective access to major insurance carriers, advanced
planning support, expertise in risk underwriting, and back office
processing to insurance brokers, financial planners, and various
institutions such as banks, wirehouses, and certified public accountant
firms. For more information, see www.highlandbrokerage.com.
This press release includes certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995,
including statements regarding future financial performance, future
growth, future investments in Highland’s business, future synergies,
future technology investments and growth in new markets. These
statements are based on management's current expectations or beliefs and
are subject to uncertainty and changes in circumstances. Actual results
may vary materially from those expressed or implied by the statements
herein due to changes in economic, business, competitive and/or
regulatory factors, and other risks and uncertainties affecting the
operation of the Company's business. These risks, uncertainties and
contingencies include those set forth in the Company's annual report on
Form 10-K for the fiscal year ended December 31, 2013 and other factors
detailed from time to time in its other filings with the Securities and
Exchange Commission. The information set forth herein should be read in
light of such risks. The Company is under no obligation to, and
expressly disclaims any obligation to, update or alter its
forward-looking statements, whether as a result of new information,
future events, changes in assumptions or otherwise.
Copyright Business Wire 2014