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VOL. 132 | NO. 100 | Friday, May 19, 2017

Wunderlich Securities Acquired by LA Firm in $67M Deal

By Andy Meek

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Memphis-based investment firm Wunderlich Securities Inc. will be acquired by a publicly traded Los Angeles-based financial services firm, B. Riley Financial, in a $67 million deal expected to close in June.

The combined entity will have about $11 billion in assets under administration, with 25 offices across the U.S. Wunderlich CEO Gary Wunderlich will continue as the top executive at Wunderlich – which is retaining its brand – and he will join B. Riley’s board upon closing of the deal.

Wunderlich was founded in 1996 and generated $116.9 million in revenue over the 12-month period ended March 31. Wunderlich said B. Riley’s platform is complementary to his firm's business and that the acquisition “will provide our expanded client base with a broader suite of products and services to better meet their financial needs.”

“The increased scale and expanded capital resources will not only help accelerate Wunderlich’s growth, but also further B. Riley Financial’s position as the leader in small-cap investment banking and brokerage,” Wunderlich said.

The combined organization will provide research coverage of more than 700 companies across a range of industries. The firm will also include a significant asset valuation and disposition business, as well as a business that specializes in providing complex restructuring solutions.

By way of context for the deal, a B. Riley investor presentation notes that the industry has seen “significant consolidation” of small and mid-sized broker dealers. As of April, according to the firm, there were 3,813 broker-dealers versus 4,289 in 2012.

In addition to following a pattern of consolidation, B. Riley also gets to add about 37,000 active wealth management accounts to its capital management business. Wunderlich’s investment banking and capital markets business also enhances B. Riley’s platform by expanding its institutional client base, small-cap equity research coverage and proprietary trading capabilities.

Wunderlich, in an interview after the deal was made public, stressed that clients won’t see much of a difference in their experience.

“I think culturally, it’s a great fit, and it’s a great opportunity for us,” he said.

The transaction is “only additive,” he continued, adding that Wunderlich’s management, officers and brand will stay the same.

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