There is a new broker-dealer in the municipal market. With the consummation of their merger on Friday, DEPFA Bank PLC and the municipal capital markets group of First Albany Capital Inc. formed the newly minted DEPFA First Albany Securities LLC. Following a flurry of system shuffling over the weekend, yesterday was the new broker-dealer’s first day of business.First announced in March, the deal stipulated that DEPFA would pay parent company First Albany Cos., $12 million for its muni group and the rights to the First Albany name. DEPFA also agreed to buy the group’s municipal bond portfolio as part of the transaction.The former First Albany parent, in turn, changed its name to Broadpoint Capital Inc.The linchpin of DEPFA’s completing the acquisition was whether it could get a license to operate a new U.S.-based broker dealer.“At its core, the clearing and operations and financial systems were remaining with First Albany, so those aspects of the broker-dealer needed to be built,” said Kenneth Gibbs, former head of the First Albany muni group who is now in charge of DEPFA First Albany. “The regulators needed to be comfortable that all aspects of the business were correctly built.”Gibbs said the First Albany group considered a wide range of potential buyers, including some of the largest U.S. banks. Ultimately, DEPFA’s public-sector focus helped put the Irish-German bank on top of the First Albany group’s list, he said.“The team at First Albany had a historic business and it was looking for a new home and a new way to grow and expand what we had been doing,” Gibbs said. “They were our first choice.”With the merger out of the way, the combined firm’s leaders will now have growth on their mind.The combined firm will have offices in Albany, N.Y.; Boston; Chadds Ford, Pa; Chicago; Dallas; Houston; New York; Richmond, Va.; Sacramento; and San Francisco. Gibbs said all 68 people who were working in the First Albany municipals group made the transition to the new, combined firm.“I intend to be approaching Santa with a long list,” Gibbs said. “I think we may be the biggest buyer in this recruiting season.” Gibbs would not say which sectors or regions he sees as top priorities for expansion.DEPFA First Albany is scheduled to senior manage its first deal this week — $28 million for the Dormitory Authority of the State of New York.
