ATLANTA -- Continuing its expansion as a regional power in the Southeast, Memphis-based Morgan Keegan & Co. announced plans Tuesday to purchase most of Porter, White & Yardley Inc., a Birmingham, Ala.-based securities firm.
Morgan Keegan said in a statement yesterday that it will acquire Porter's bond trading and underwriting operation and stock brokerage in Birmingham; its First Commerce Capital investment banking division in Montgomery, which specializes in tax-exempt industrial development bonds; and a branch office in St. Petersburg, Fla., that opened in 1991.
Those joining Morgan Keegan from Porter White include its chairman, Thomas K. Yardley.
However, Porter White's municipal finance operation in Birmingham will remain an independent company under the direction of James H. White 3d, currently Porter's president, according to Morgan Keegan.
Porter, founded in 1987 by Yardley and George Porter, has become a leading market-maker in Alabama securities.
"This acquisition will position Morgan Keegan as the dominant player in the Alabama secondary market," Morgan Keegan's president, William W. Deupree Jr., said in the firm's statement.
"The additions of Tom Yardley as first vice president and George Porter as first vice president and head of Alabama municipal secondary underwriting and marketing adds invaluable expertise to both our sales and trading efforts in Alabama," Deupree continued. "The First Commerce Capital division will provide a nationwide entree into an area of municipal finance in which Morgan Keegan is not currently active."
Deupree declined to reveal terms of the agreement, but said it is expected to close on Jan. 31.
White said in an interview yesterday that he chose to maintain Porter White's investment banking arm as an independent operation because "we can do just as good a job on our own."
"Tom indicated he wanted to scale back, and we wanted to charge forward," White said. "Something had to give." White said the new firm will be called Porter, White & Co. and will continue to provide underwriting and financial advisory services out of Birmingham with a staff of 16 professionals.
He noted that Morgan Keegan once before attempted to buy Porter White, but that acquisition fell through after the stock. market crash of October 1987.
Morgan Keegan's planned acquisition of Porter Yardley continues a string of acquisitions throughout the South.
Last March, Morgan Keegan bought Cumberland Securities Corp. in Knoxville, Tenn., following its purchase of New Orleans-based Scharff & Jones Inc. in 1990 and Little-Rock based T.J. Raney in 1989.
Yardley said in Morgan Keegan's statement that the transaction will enhance his municipal trading operation in Birmingham through access to Morgan Keegan's larger distribution network and capital base. These added resources, he said, will allow First Commerce to underwrite larger municipal issues and initiate corporate underwritings.
Morgan Keegan, founded in 1969, has 23 offices in 10 states and over $85 million in equity capitalization. Porter Yardley has about $5 million in equity capital.
Ben Fisher, principal and manager of the firm's operation in St. Petersburg, said he welcomed the acquisition.
"I think the purchase would be advantageous to us in St. Petersburg, and I look forward to working with Morgan Keegan." Fisher said.
In 1992, Porter White ranked second in underwriting Alabama financings when full credit is given to each manager, racking up 19 issues totaling $496.8 million for a 20.9% market share, according to Securities Data Co.
By contrast, Morgan Keegan participated as a manager in only three Alabama financings totaling $17.4 million, for a ranking of 33 and a 0.7% market share.
Nationally, Morgan Keegan ranked 43d, when full credit is given to book managers, on 50 issues totaling $766.9 million for a 0.3% market share, Securities Data said. This compares with a national ranking of 81 for Porter White, based on 50 deals totaling $296.5 million for a 0.1% market share.