KBW shareholders will receive $17.50 per share, with $10 per share in cash and $7.50 per share in Stifel common stock, a 7.4% premium over KBW’s Friday closing price.
The combined company will provide sales and trading, research in financial services and investment banking. KBW’s Keefe, Bruyette & Woods broker-dealer subsidiary will remain independent of Stifel.
Results from September earnings show that net revenues for Stifel and KBW were $1.8 billion. KBW’s excess capital of $250 million will be available to Stifel upon closing.
Stifel CEO Ronald J. Kruszewskisaid in a statement the transaction would be accretive to shareholder value.
“This merger with KBW, a premier, specialized financial services firm, provides Stifel with an exciting opportunity to grow and become a market leader in the financial services sector,” he said.
Kruszewski added, “Our shared culture and platforms are highly complementary, and this combination expands our capabilities at a time when we believe the financial services sector is poised to benefit from improving fundamentals.”
Stifel reported 3Q12 earnings increase of 69% as principal transactions revenue increased 34%.