Ameriprise Sells Securities America Unit For $150M

MINNEAPOLIS (AP) -- Ameriprise Financial Inc. has agreed to sell Securities America Financial Corp. and its subsidiaries to Ladenburg Thalmann Financial Services Inc. for $150 million in cash, the companies said on Wednesday.

Ameriprise will also receive future cash payments if Securities America meets certain financial goals over the next two years, the companies said.

Securities America is an independent broker-dealer with about 1,700 financial advisers and $50 billion in client assets. The transaction is subject to regulatory approvals, and is expected to close by the end of this year.

The deal comes after Ameriprise announced plans in April to sell Securities America. Earlier that month, Securities America agreed to pay $150 million to settle a class action lawsuit alleging that it didn't do proper due diligence on investments it sold that later proved worthless. Investors with Securities America lost $400 million after participating in shale gas investments with Provident Royalties LLC and debt sales sponsored by Medical Capital Holdings Inc.

The settlement forced Ameriprise to book a $118 million pretax charge in the first quarter, on top of a $40 million pretax charge it booked in the 2010 fourth quarter.

Minneapolis-based Ameriprise said in April that a sale would allow Securities America to focus on growth opportunities independently, and let Ameriprise focus its resources on its own branded-adviser business.

After the deal closes, Jim Nagengast will remain president and CEO of Securities America, Ladenburg Thalmann said. Its senior managers will continue to operate Securities America as a stand-alone business based from its current headquarters in La Vista, Neb.

Miami-based Ladenburg Thalmann said the transaction will be financed by an affiliate of Phillip Frost, Ladenburg's principal shareholder and board chairman.

Frost said the acquisition is consistent with his company's goal to expand into a more diversified financial-services firm. The addition of Securities America's broker-dealer business will complement Ladenburg Thalmann's capital markets and investment banking operations, he said.

Based on the last 12 months, the combined company would have had about $675 million in revenue, with about 2,700 independent financial advisers and $70 billion in total client assets, Ladenburg Thallman said.

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