A small third-party broker dealer is making a move to build scale amid growing competition.
Infinex Financial Group is acquiring Essex National Securities for an undisclosed amount, the two firms announced on Wednesday.
The acquisition will give Infinex increased scale as third-party broker-dealers nationwide struggle to offset rising regulatory and technology costs. It will also give the firm a bicoastal footprint as it expands beyond the East Coast.
"Our objective is to tie the coasts together, so we'll have an office in both Connecticut and an office in Napa," says Stephen Amarante, president and CEO of Infinex, which is based on Meriden, Conn., while Essex is in Northern California. "We'll be positioned in both marketplaces."
Infinex's might in relationship management and Essex's prominence among super-regional banks will bring together the top strengths that each has to offer, Amarante says. The merger of the two companies will create an "independently owned firm with all of the resources of a super-large firm but yet still have that feel of a smaller relationship-driven firm," he adds. The acquisition, which has been approved by the boards of both firms, is expected to close this fall.
MORE THAN 200 INSTITUTIONAL CLIENTS
The combined entity is expected to generate over $135 million in annual revenue and serve more than 210 financial institutions, 500 full-time financial advisors and 1,000 licensed branch employees, the firms said in the announcement.
Infinex and Essex together posted $131 million in revenue in 2014, Infinex said. At the end of 2014, Infinex had 462 full- and part-time financial advisors and served 197 financial institutions, while Essex had 250 advisors and served 21 institutions, according to research firm Kehrer Bielan Research & Consulting.
A significant percentage of Essex employees and executives will join Infinex. Amarante will lead the combined entity as president and CEO. Scott Davis, the president and CEO of Essex, will be in charge of all relationship management and new business development, and will also be part of the executive management team. "We share a lot of the same values in terms of how we view the industry,"Amarante says.