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LPL Financial (LPLA) Closes Deal to Buy Assets of E.K. Riley

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LPL Financial Holdings Inc. (LPLA - Free Report) along with its subsidiary, LPL Financial LLC, has completed the acquisition of the assets of E.K. Riley Investments, LLC. The asset-purchase agreement was announced in May 2020.

Headquartered in Seattle, E.K. Riley is a broker-dealer and registered investment advisor (“RIA”).  It provides independent financial advice to individuals, affluent families and business owners. It serves more than $2 billion of client assets, which are expected to onboard to LPL Financial’s platform by the end of this year.

Moreover, 90% of E.K. Riley’s 35 independent advisors will likely join LPL Financial.

LPL Financial continues to expect a transaction multiple of 6 times post-synergy EBITDA.

Rich Steinmeier, managing director and divisional president, Business Development at LPL Financial, stated “It is a privilege and honor to welcome the E.K. Riley team to LPL. An established and successful firm, E.K. Riley recognized the value that a partnership with LPL could bring to their firm today as well as into the future. One way we demonstrate our commitment to our advisors is through the delivery of relevant resources and technology that help them thrive in today’s competitive environment. And with our scale and unwavering advisor focus, our clients can be assured they have a partner who will invest in their success over the long run.”

E.K. Riley’s president, Brian Bertsch, said, “Our partnership with LPL is the result of overall cultural similarities between our organizations. We continue to be consistently impressed with their people-centric culture. We are excited to see our advisors thrive as part of the LPL family.”

Our Take

LPL Financial’s inorganic growth efforts are expected to keep supporting the top line. In April 2020, the company announced a deal to acquire broker-dealer and RIA firm, Lucia Securities. In 2019, it acquired Allen & Company of Florida, while in 2018, it acquired all of the outstanding shares of AdvisoryWorld. The deals along with the other completed deals in the past poise LPL Financial well for growth.

Over the past three months, shares of the company have gained 15.2% compared with 15.7% growth recorded by the industry.

Currently, LPL Financial carries a Zacks Rank #3 (Hold).

A few better-ranked stocks from the same space are mentioned below.

ETRADE Financial Corporation (ETFC - Free Report) witnessed an upward earnings estimate revision of 13% for the current year over the past 60 days. Its share price has risen 28.2% over the past year. It currently carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for TD Ameritrade Holding Corporation’s (AMTD - Free Report) current fiscal year earnings has been revised 21.3% upward over the past 60 days. Its share price has decreased 12.6% over the past 12 months. The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Interactive Brokers (IBKR - Free Report) witnessed an upward earnings estimate revision of 26.9% for the current year over the past 60 days. Its share price has risen 11% over the past year. It currently carries a Zacks Rank #2.

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