(Adds details, analyst comment, share movement)
By Sweta Singh
BANGALORE Dec 19 Investment bank Stifel
Financial Corp (SF.N) said it will buy financial advisory
business firm Butler Wick & Co from United Community Financial
Corp (UCFC.O) for $12 million as it seeks to strengthen its
brokerage segment amid market turmoil.
Shares of Stifel Financial rose as much as 8 percent to
$47.33 on the New York Stock Exchange. The shares have gained
25 percent in value since January.
With the deal, Stifel Financial meets its goal of expanding
in the Ohio Valley Region, and further builds upon the firm's
recent growth achieved through acquisitions, Chief Executive
Ronald Kruszewski said.
Stifel Financial had acquired New Jersey-based brokerage
Ryan, Beck & Co in February last year.
Fox-Pitt analyst David Trone expects the deal to boost
Stifel Financial's earnings per share by at least 7 cents.
In an interview with Reuters in October, CEO Kruszewski had
said the phenomenal turmoil of the past two years is expected
to trigger changes in financial services regulation, with
brokers in particular undergoing more regulatory scrutiny,
creating more merger opportunities.
The credit crisis has wiped off investment banks from Wall
Street and prompted regulators to look deeper into laws
governing financial bodies in the United States.
Brokerage Stifel Nicolaus, the main unit of Stifel
Financial Corp, has about 1,300 brokers. The firm has hired
brokers from Wachovia Securities, which saw its parent Wachovia
Corp WB.N struggle before agreeing to be acquired by Wells
Fargo & Co (WFC.N).
Stifel Financial expects to close the latest deal during
the fourth quarter.
The company's shares were trading up 6 percent at $46.60
Friday morning on the New York Stock Exchange.
(Editing by Pratish Narayanan)