Stifel Reportedly In Negotiations To Acquire Sterne Agee

Stifel Reportedly In Negotiations To Acquire Sterne Agee

Stifel Financial is in negotiations with Sterne Agee regarding a potential acquisition, which would combine two of the oldest and largest brokerages firms in the United States, according to Bloomberg based on information from a person familiar with the situation.

Stifel Financial is a full-service brokerage and investment banking firm based in St. Louis, Missouri.  It was established in 1890. Stifel Financial is a public company trading under the ticker “SF.”

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Sterne Agee is one of the largest privately owned financial services firms in the United States, which was established in 1901. It has a team of more than 2,000 financial professionals. Last year, the company named Eric Needleman as chairman.

The person with direct knowledge about the negotiations told Bloomberg about the possibility that Stifel Financial and Sterne Agee will announce a deal within days. The person requested the media entity to keep his identity anonymous because of the confidential nature of the discussions between the companies.

Stifel Financial’s previous acquisitions

During the financial crisis, Ronald Kruszewski, chairman and CEO of Stifel Financial led the company in acquiring firms including Keefe, Bruyette & Woods (KBW) and Thomas Weisel Partners Group (TWP).

Different challenges including regulatory changes, new technology, and declining margins prompted brokerage firms to merge or shut down. Stifel Financial purchased KBW for $575 million in 2012.  The company also acquired a bond trading business from Knight Capital Group in 2013.

During a conference with investors last September, Kruszewski emphasized that opportunities for acquisitions are created when there is turmoil in companies or across the market.

Kruswezki said, “We go in and provide stability, provide operational stability and a good culture.”  He became CEO of Stifel Financial in 1997. At the company had only $733 employees with annual revenue of $136 million. At present, it has already more than 6,000 employees with over $2 billion in annual revenue for the fiscal ended September 30, last year.

Stifel recently signed agreement with Leumi Partners

Last January, Stifel Financial signed an investment banking partnership agreement with Leumi Partners, an investment and merchant banking unit of Bank Leumi le-Israel B.M.

Under the agreement, Stifel Financial and Leumi Partners will work together in providing investment banking services to Israel-related companies looking to raise debt or equity privately or on public markets.

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