Ladenburg Thalmann acquires insurance brokerage for $42M
August 1, 2014 by Brian Bandell- South Florida Business Journal
Ladenburg Thalmann Financial Services acquired Highland Capital Brokerage, an insurance brokerage with over 280 employees.
The Miami-based investment banking, asset management and securities brokerage firm (AMEX: LTS) has not previously worked as an insurance broker. Birmingham, Ala.-based Highland specializes in life insurance, annuities and long-term care. It has 10 regional offices, plus a host of sales offices, including in Boca Raton and Tequesta.
Ladenburg Thalmann’s purchase price breaks down to $3.6 million in cash, 2.54 million shares of its stock, the repayment of $22.3 million in debt and the assumption of a $7 million loan.
News of the deal sent shares of Ladenburg Thalmann up 10 cents, or 3.2 percent, to $3.23 on Friday morning.
“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,” Ladenburg Thalmann Chairman Dr. Phillip Frost said in a news release.
Ladenburg Thalmann is among the largest independent broker dealers in the nation, with over $90 billion in client assets under management. It plans to hire additional employees to support Highland’s growth.
Highland had $46 million in revenue for the 12 months ended June 30. Highland CEO Jim Gelder and his senior management team will remain with the company.
“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,” Ladenburg Thalmann President and CEO Richard Lampen said in a news release. “We are committed to building a partnership with Highland’s management and principals to accelerate the firm’s growth and amplify their culture.”
Ladenburg Thalmann used Graubard Miller as its legal counsel for the deal, while Highland worked with Sirote & Permutt.
