Broker-Dealer Buys Alabama Wholesale Broker for $42M

Miami-based broker-dealer Ladenburg Thalmann Financial Services Inc. said it has acquired Highland Capital Brokerage Inc., an independent life, annuities and long term care insurance brokerage, for $42 million.

Highland, which is headquartered in Birmingham, Alabama, provides point-of-sale support along with marketing and estate and business planning techniques for institutional clients and independent producers.

The $42 million purchase price for the common stock of Highland was $12.7 million, consisting of approximately $3.6 million in cash and 2,540,762 shares of Ladenburg common stock. In addition, Ladenburg repaid Highland’s bank facility of $22.3 million and $7 million of Highland’s promissory notes remain outstanding.

Ladenburg Thalmann is a publicly-traded financial services company. Its subsidiaries include Securities America, Triad Advisors, Investacorp, Premier Trust, Ladenburg Thalmann Asset Management and 135-year-old NYSE member investment bank, Ladenburg Thalmann & Co. Inc. The firm has more than 2,800 independent financial advisors with approximately $90 billion in total client assets since it first entered the independent broker-dealer space in 2007.

“The acquisition of Highland marks Ladenburg’s entrance into the wholesale life insurance marketplace and reflects our commitment to building a strong, diversified financial services organization,” said Dr. Phillip Frost, Ladenburg’s chairman and principal shareholder.

Highland’s CEO Jim Gelder and his senior management team will continue to operate Highland as a standalone business.

Highland has 10 regional offices, 12 principals, 90 sales vice presidents, 55 corporate employees and approximately 135 field office staff.

The Highland acquisition will give Ladenburg’s independent advisors—affiliated through subsidiaries Securities America, Triad Advisors and Investacorp—greater access to insurance products and services.