Stifel Acquires Miller Buckfire

Wow, another big move here by Stifel. First Weisel, then KBW, now Buckfire.

What's the consensus on the street on Stifel now? They've clearly bought some of the best brands in their respective industry verticals.

 

don't think Stifel's image has changed much in the grand scheme. it's still a normal MM player.

honestly feel bad for people from weisel and MB. both were previously somewhat exclusive / elite shops and IMO their brand is somewhat diluted by the association from Stifel. MB has also had more than a few senior departures in the last few years but that's a different story.

 
iRX:
Buckfire is one of the worst firms out there right now. Teams are shrinking and many of the big-swinging MDs that once made Buckfire have left. Honestly I don't understand Stifel's logic, but if I'm not mistaken they had already owned like 40% prior to this announcement (someone can correct me here, I'm too lazy to Google it).

correct i think they gave an equity injection to the firm for minority ownership and it was a mutually beneficial relationship for the two shops

for what its worth stifel has a great ER division and tech team in SF that deals with lower MM mkt cap firms, this might create SH value for Stifel shareholders but constantly trying to grow a firm just through acquisitions and not organically just shows tht Stifel is trying to be a full service MM firm like Jefferies and trying to gain respect/presitige without landing solid deals

biggerfirm dsnt always mean better and its iroic bcuz most BBs in the past 5 years have shown with their declining performance less cash bonuses and massive layoffs tht being better isnt always better...wierd how Stifel dsnt seem to get tht. jusr my two cents tho, only time will tell if good move!

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 

I can't imagine this will go well. Integrating 2 banks is hard enough...Stifel is now going to try blending KBW, Weisel, and Buckfire into one coherent platform?

Although Stifel is buying these firms on sale, I would be surprised if they get half of what they paid for after defections and lost clients. I think this is especially true when there is a sizable quality differential. Credit Suisse buying First Boston, UBS buying Paine Webber, Citi buying Salomon...it just doesn't work that well.

If Evercore or Sandler O'Neill bought KBW, I would expect it to go fine. If Lazard, Rothschild, BX, or HLHZ bought MB, I would expect it to go alright (even with some downsizing). As opposed to integrating its acquisitions with an existing platform (like BofA did with ML), Stifel is trying to create new lines of business solely through acquisitions. Even with stock incentives, I do not have high hopes for them.

 
West Coast rainmaker:
I can't imagine this will go well. Integrating 2 banks is hard enough...Stifel is now going to try blending KBW, Weisel, and Buckfire into one coherent platform?

Although Stifel is buying these firms on sale, I would be surprised if they get half of what they paid for after defections and lost clients. I think this is especially true when there is a sizable quality differential. Credit Suisse buying First Boston, UBS buying Paine Webber, Citi buying Salomon...it just doesn't work that well.

If Evercore or Sandler O'Neill bought KBW, I would expect it to go fine. If Lazard, Rothschild, BX, or HLHZ bought MB, I would expect it to go alright (even with some downsizing). As opposed to integrating its acquisitions with an existing platform (like BofA did with ML), Stifel is trying to create new lines of business solely through acquisitions. Even with stock incentives, I do not have high hopes for them.

This.

I don't throw darts at a board. I bet on sure things. Read Sun-tzu, The Art of War. Every battle is won before it is ever fought- GG
 
Best Response
West Coast rainmaker:
I can't imagine this will go well. Integrating 2 banks is hard enough...Stifel is now going to try blending KBW, Weisel, and Buckfire into one coherent platform?

Although Stifel is buying these firms on sale, I would be surprised if they get half of what they paid for after defections and lost clients. I think this is especially true when there is a sizable quality differential. Credit Suisse buying First Boston, UBS buying Paine Webber, Citi buying Salomon...it just doesn't work that well.

If Evercore or Sandler O'Neill bought KBW, I would expect it to go fine. If Lazard, Rothschild, BX, or HLHZ bought MB, I would expect it to go alright (even with some downsizing). As opposed to integrating its acquisitions with an existing platform (like BofA did with ML), Stifel is trying to create new lines of business solely through acquisitions. Even with stock incentives, I do not have high hopes for them.

not sure if i agree with you. Sandler buying KBW may make sense, though I would highly doubt this would happen. Sandler and KBW both have similar business strategies. If they were to acquire KBW, there would be a lot of overlap - doesn't make much sense to me aside from their senior talent. Even then, coverage will overlap. Evercore wouldn't make sense - they're not a major player in the small/mid-cap bank space as Stifel and Sandler are. In addition to being a player in the small/mid-cap bank space as KBW operates, Stifel has a retail arm that KBW can utilize. It's a strategic move by both parties, as they say. They're planning on having it operate as an independent unit with the CEO remaining CEO of the KBW unit and integrating Stifel's FIG team under the KBW umbrella brand. But who really knows what will happen....

 
RonaldBacon:
not sure if i agree with you. Sandler buying KBW may make sense, though I would highly doubt this would happen. Sandler and KBW both have similar business strategies. If they were to acquire KBW, there would be a lot of overlap - doesn't make much sense to me aside from their senior talent. Even then, coverage will overlap. Evercore wouldn't make sense - they're not a major player in the small/mid-cap bank space as Stifel and Sandler are. In addition to being a player in the small/mid-cap bank space as KBW operates, Stifel has a retail arm that KBW can utilize. It's a strategic move by both parties, as they say. They're planning on having it operate as an independent unit with the CEO remaining CEO of the KBW unit and integrating Stifel's FIG team under the KBW umbrella brand. But who really knows what will happen....

You are right on both counts, I think. It would make more sense for Sandler / Evercore to strategically poach key hires. For instance, Sandler would benefit from KBW's equities team and strength in non-bank financial institutions. Likewise, outright buying a firm like KBW would be a big commitment for Evercore - although they are positioning themselves as specialists in research, the acquisition would make them "the FIG bank".

Still, I can't see this going well for the people at KBW. Promises of autonomy aside, I think it is just a matter of time before it is folded into Stifel. For instance, UBS Paine Webber, Credit Suisse First Boston, Salomon Smith Barney... I am not sure whether it is an ego thing, a search for a "unified brand", or just a natural process new hires replace old, but independent brands seem to be a rarity.

 
newfirstyear:
Wow, another big move here by Stifel. First Weisel, then KBW, now Buckfire.

What's the consensus on the street on Stifel now? They've clearly bought some of the best brands in their respective industry verticals.

This has been a long time coming. Stifel put a chunk of change into Miller Buckfire back in mid-11, after it won a bidding war against Raymond James. That's given Stifel a year and a half to feel out Buckfire, as they've begun to incorporate Buckfire's restructuring advisory into their offerings. I'm confident that they're confident with the fit and the move forward.

West Coast rainmaker:
I can't imagine this will go well. Integrating 2 banks is hard enough...Stifel is now going to try blending KBW, Weisel, and Buckfire into one coherent platform?

Although Stifel is buying these firms on sale, I would be surprised if they get half of what they paid for after defections and lost clients. I think this is especially true when there is a sizable quality differential. Credit Suisse buying First Boston, UBS buying Paine Webber, Citi buying Salomon...it just doesn't work that well.

If Evercore or Sandler O'Neill bought KBW, I would expect it to go fine. If Lazard, Rothschild, BX, or HLHZ bought MB, I would expect it to go alright (even with some downsizing). As opposed to integrating its acquisitions with an existing platform (like BofA did with ML), Stifel is trying to create new lines of business solely through acquisitions. Even with stock incentives, I do not have high hopes for them.

I agree with you on the first point in a general sense. There's a good truism, that 1 I-Bank + 1 I-Bank = 1 I-Bank, in large part due to difficulties in retaining bankers through the uncertainty of a merger.

That said, Stifel plans to operate operate KBW as an unconsolidated sub. I think this makes the change less likely to scare away dealmakers, who might otherwise bounce to Sandler or elsewhere. Deferred equity-based comp is also being rolled into SF stock (instead of being cashed out), which should also help with retention.

In addition, a separate sub preserves KBW's reputation. This allows Stifel to better avail itself of KBW's solid reputation in the FIG space, especially research.

I think you're also mistaken on Stifel's growth of late. While they've definitely been pretty active, Stifel has a strong FIG practice to begin with. I believe the ultimate plan is to roll Stifel's already quite strong FIG practice into the KBW brand. With that in mind, and obviously adjusting for however well the deal's retention terms pan out, you end up with a powerhouse MM FIG shop, with significantly better cap markets syndication. The combo has the potential to leave Sandler in the dust, (Sandler and KBW used to compete on relatively even terms), and I think smart bankers see this.

On the whole, I think Stifel has done a great job of demonstrating successful acquisitions in an industry where many others have failed. Maybe it has something to do with the particular nature of middle market i-banking, and maybe Stifel has some special managerial sauce to grease integration (probably some of both).

"There are three ways to make a living in this business: be first, be smarter, or cheat."
 

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