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Raymond James (RJF) Expands Fixed Income Unit, to Buy SumRidge

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To further boost its fixed income trading operations, Raymond James (RJF - Free Report) has inked a deal to acquire SumRidge Partners, LLC. The financial details of the transaction, which is still subject to certain regulatory and other closing conditions, were not disclosed.

Jersey City, NJ-based SumRidge is a technology-based “fixed income market maker” specializing in investment-grade and high-yield corporate bonds, municipal bonds and institutional-preferred securities. Its integration with Raymond James’ Fixed Income Capital Markets will complement “core client-facing business” and add sophisticated trading technologies and risk management tools.

Co-founded by Tom O’Brien and Kevin Morano in 2010, SumRidge currently has nearly 45 employees who will continue to operate under them following the deal's closure. Both O’Brien and Morano will become senior managing directors.

Paul Reilly, Raymond James chairman and CEO, said “This acquisition is further evidence of our commitment to provide cutting-edge technology to advisors, clients and stakeholders.”

Further, Horace Carter, executive vice president and president of Fixed Income, noted, “SumRidge is an exciting combination of a strong team and advanced technology that will only enhance Raymond James’ position in a rapidly evolving fixed income and trading technology marketplace.”

Our Take

Over the past several years, RJF has been successfully growing through strategic acquisitions, which has also helped it expand into Europe and Canada. This January, it acquired U.K.-based Charles Stanley Group PLC.

Also, in October 2021, it signed an agreement to acquire TriState Capital Holdings, Inc. for roughly $1.1 billion in cash and stock.  Supported by a digital lending platform and a solid risk management technology system, TriState Capital provides securities-based loans (SBL) to high-net-worth borrowers across the United States. Following the deal closure, Raymond James’ SBL balance is likely to be roughly 33% of net loans (on a pro forma basis).

These deals, along with several past ones, poise Raymond James well for future growth. Management looks forward to actively growing through acquisitions with an aim to further strengthen the PCG and Asset Management segments.

Shares of Raymond James have rallied 10.9% so far this year against a 4% decline of the industry it belongs to.

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Currently, RJF sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Inorganic Moves by Other Finance Companies

First Horizon Corporation (FHN - Free Report) and The Toronto-Dominion Bank (TD - Free Report) signed a definitive agreement wherein the latter will acquire the former in an all-cash deal valued at $13.4 billion or $25 for each FHN common share.

Toronto-Dominion anticipates the FHN acquisition to close by Nov 1, 2022. The buyout is subject to customary closing conditions, including approvals from First Horizon's shareholders and the United States and Canadian regulatory authorities.

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