By Avik Das and Jessica Toonkel
Jan 16 RCS Capital Corp on Thursday
announced it would buy independent broker-dealer Cetera
Financial Group from private equity firm Lightyear Capital LLC
for about $1.15 billion in cash to expand its retail brokerage
New York-based Lightyear Capital, which is run by former
Paine Webber Group Inc Chief Executive Officer Donald Marron,
created Cetera in 2010 when it acquired three ING
Over the years, Lightyear has continued to build Cetera
through acquisitions. Just last year, it acquired two brokerage
firms from MetLife Inc. Today the firm provides broker-dealer
and advisory services to about 6,500 independent financial
professionals as well as financial institutions.
RCS, which has been an aggressive acquirer over the past few
months, approached Lightyear several times last year about
buying Cetera, Marron said. But it was not until right before
Christmas that Lightyear took the offer seriously, he said.
"They said Cetera's management would remain as it is and
they asked if they could make a preemptive bid," Marron told
Reuters in an interview. "Price is important to private equity,
but also is the firm (so) its value is in Valerie Brown and her
Cetera Chief Executive Valerie Brown will continue to
This is the fourth brokerage acquisition by New York-based
RCS Capital, which just went public in June, in the last four
It bought Summit Financial Services for $49 million in
November and Investor Capital Holdings for about $52.5 million
in October. It also bought Hatteras Funds Group in the same
month for an undisclosed amount.
The company's investment banking arm and Barclays
were its financial advisers, while Bank of America Merrill Lynch
The transaction is expected to close in the later part of
RCS Capital's shares were trading at $19.10, up over 3
percent in late afternoon trading, the New York Stock Exchange.