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Stifel Financial and KBW Announce Strategic Merger

November 05, 2012, 07:36 AM
Filed Under: Mergers & Acquisitions

According to a joint press release, Stifel Financial Corp. and KBW, Inc. have entered into a definitive merger agreement to create the premier middle-market investment bank with a specialized focus on the financial services industry. The transaction will make approximately $250 million in excess capital on KBW’s balance sheet is expected to be immediately available to Stifel upon closing.

Ronald J. Kruszewski, chairman, president and CEO of Stifel Financial said, “This transaction is expected to be accretive to shareholder value. This merger with KBW, a premier, specialized financial services firm, provides Stifel with an exciting opportunity to grow and become a market leader in the financial services sector. Our shared culture and platforms are highly complementary, and this combination expands our capabilities at a time when we believe the financial services sector is poised to benefit from improving fundamentals. I am confident our clients will benefit from our expanded services and expertise.”

Thomas B. Michaud, president and CEO of KBW, said, “This merger will allow KBW to focus on its strengths in the financial services sector while offering clients a greatly expanded array of products and services through the Stifel platform. KBW’s deep roster of client relationships will be supported by a strong institutional business and global wealth management business. With little overlap, this merger will provide a significant opportunity to grow our combined companies' market share.”

The combined company will provide investment banking, sales and trading, and research in the financial services vertical through KBW’s Keefe, Bruyette & Woods broker-dealer subsidiary, which will continue to operate as an independent subsidiary of Stifel following completion of the transaction. Stifel will utilize KBW’s preeminent market brand as a highly focused, specialized financial services platform of choice.

Stifel was advised by its own wholly owned subsidiary, Stifel, Nicolaus & Company, Incorporated and was represented by Bryan Cave LLP. Stephens Inc. rendered a fairness opinion to the board of directors of Stifel Financial Corp. KBW was advised by its own wholly owned subsidiary, Keefe, Bruyette & Woods, Inc., and BofA Merrill Lynch, and was represented by Sullivan & Cromwell LLP.

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