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Deals & People January 17, 2014
RCS to Acquire J.P. Turner
RCS Capital Corporation (RCAP) will purchase J.P. Turner & Company LLC, an independent broker/dealer and investment banking firm, and its affiliated advisory company for $27 million in aggregate consideration.
Reported by John Manganaro
The move by RCAP comes just a day after the company announced it has reached a separate deal to acquire independent broker/dealer Cetera and its 6,600 advisers. RCAP is also engaged in the acquisition of a number of other firms, including Summit Brokerage Services and Investors Capital Holdings.
The purchase of J.P. Turner and its affiliated companies will add 325 producing advisers with $4.3 billion in assets under management to RCAP’s operations, the firm says. Once all pending purchases are complete, RCAP will have some 9,300 registered representatives and financial advisers, making it the second or third largest independent broker/dealer in the U.S. by number of advisers, as measured by the 2013 independent broker/dealer rankings report from Financial Advisor Magazine.
That report lists LPL Financial, with about 13,300 advisers, as the biggest independent broker/dealer network by adviser number. Ameriprise Financial is ranked second, with about 9,700. It’s yet unclear if or when RCAP will surpass Ameriprise in terms of number of advisers.
RCAP will pay $16.2 million upon closing the deal, and an additional $10.8 million is payable on the first anniversary of the closing, according to a statement from RCAP. Seventy percent of the amount is to be paid in cash and the remainder in shares of RCAP’s class A common stock. Up to $7.55 million in additional aggregate earn-out payments for the three-year period ending December 31, 2016, is also included in the deal.
Following the acquisition, J.P. Turner will become part of the independent financial adviser network at RCAP.
Aside from its broker/dealer and registered investment adviser (RIA) platforms, J.P. Turner is also active in investment banking, real estate, energy, insurance and annuities, and managed products, according to an investor presentation supplied by RCAP.
RCAP’s executive chairman, Nicholas Schorsch, has received significant media attention in the last several years for piloting large acquisitions and reshaping the financial services industry, especially within the real estate investment trust (REIT) sector.