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Stifel Financial Rallies 1.4% on Rand & Associates Buyout Deal

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Recently, Stifel Financial Corp.’s (SF - Free Report) wholly-owned subsidiary — 1919 Investment Counsel, LLC — which is an SEC-registered investment adviser inked a deal to acquire San Francisco-based Rand & Associates. Terms of the deal remain undisclosed. The bank entered into the deal with a view to fortify its wealth-management business.

Following the announcement, shares of Stifel rose 1.4%, as investors seem optimistic on expansion of the bank’s operations as well as expected synergies related to the deal.

Rand is an independent SEC-registered investment adviser with around $1.3 billion in assets under management. It serves individuals, families, and institutions with wealth management and investment counsel services. Notably, on a combined basis, 1919 and Rand cater more than $12 billion in assets under management.

“We are excited to welcome Andrew Rand and his team to Stifel,” mentioned Ronald J. Kruszewski, chairman and CEO of Stifel. “The addition of Rand to Stifel’s 1919 platform is yet another step in the firm’s expanding wealth and asset management practices. Our strategy of focusing on attracting high-quality organizations and people has been essential in the growth of our asset management business, which collectively now has more than $30 billion under management,” Kruszewski stated.

“The Rand acquisition gives 1919 a long-sought physical presence on the West Coast where we already serve many clients,” said Harry O’Mealia, president and CEO of 1919 Investment Counsel. “We are growing our firm opportunistically, focusing on doing business with those who share our commitment to serving as the advisor of choice for our clients and the employer of choice for our associates. Andrew Rand, Founder and Managing Director of Rand and his team complement us in so many ways and we are thrilled to welcome them as a partner,” O’Mealia noted further.

Conclusion

Stifel Financial’s inorganic growth activities reflect capital strength and efforts to bolster its performance. Recently, the bank also completed the acquisition of Business Bancshares and its wholly-owned subsidiary, The Business Bank of St. Louis. Also, it has diversified its revenue sources, which are likely to support the bank’s financials. Additionally, the company will benefit from improving conditions in the domestic economy.

Nonetheless, costs related to acquisitions might escalate expenses and hamper financials.

Over the past year, shares of Stifel have lost around 3%, as against the industry’s decline of 0.8%. The stock currently carries a Zacks Rank #4 (Sell).



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