After the completion, the transaction will double the size of SWS’ private client advisor network and re-establish SWS in the asset management business. SWS Group’s officials anticipate that initial costs will negatively impact SWS earnings by five to seven cents per share in the first six months. However, they project that the combination will make a positive contribution to earnings thereafter. The purchase price was not disclosed.
The acquisition is subject to customary closing conditions, including regulatory approvals. The company expects the transaction to be consummated during the first calendar quarter of 2008. Cantor Fitzgerald acted as financial advisor to ML Stern.
Donald Hultgren, president and CEO of SWS Group, said: We believe this combination will significantly benefit all parties while meeting our stated objectives of growing both organically and through acquisitions. Going forward our combined private client groups will be positioned in two of the nation’s most dynamic state economies – Texas and California.
SWS and ML Stern have similar cultures, compatible operations and complementary strengths. Mickey Stern and his team have developed a strong organization with an excellent reputation.
