ATLANTA -- Memphis-based Morgan Keegan, continuing its quest to become a market leader in municipal finance in the Southeast, this week agreed to buy Cumberland Securities Corp. in Knoxville, Tenn.
The agreement calls for Cumberland to continue as an independently operated subsidiary under Thomas Ayres, its current president, according to Morgan Keegan spokeswoman Kathy Garbuzinski.
Mr. Ayres's son, Joseph Ayres, will become a Cumberland senior vice president. Both will serve on a reconstituted board of directors that also will include Morgan Keegan's president, William W. Deupree; managing director David Ramsey; and first vice president Tom Snyder. No other changes in Cumberland's personnel are expected.
The firm's offices will remain at their current site in downtown Knoxville, Ms. Garbuzinski said.
The acquisition of Cumberland, which will be completed on March 3, follows Morgan Keegan's purchase of New Orleans-based Scharff & Jones Inc. in 1990 and Little-Rock based T.J. Raney in 1989.
"Cumberland Securities' financial advisory and public finance expertise combined with Morgan Keegan's marketing strength should result in tremendous growth for our firm in Tennessee municipal financings," Mr. Deupree said in a statement.
"The strong capital position and extensive sales force of Morgan Keegan will enable Cumberland Securities to execute more and larger financings, as well as to provide a broader range of services for our existing clients," said Thomas Ayres.
Joseph Ayres said Morgan Keegan's 22 offices in 10 states will give the Cumberland firm an opportunity to expand its business beyond the immediate area.
Cumberland Securities has had a significant presence in East Tennessee as both a financial adviser and underwriter. Its municipal underwriting business, however, has diminished following the departure in December 1990 of Thomas Ayres's brother, Brown Ayres, who sold his stake in the firm over differences about how it should be run.
The company was founded in 1972 by the two brothers and their father, Morgan B. Ayres. It is financial adviser to about 50 local governments in eastern and middle Tennessee, including Knox County and the city of Knoxville.
According to Securities Data Co./Bond Buyer, Cumberland Securities ranked third last year as financial adviser in Tennessee, serving as consultant on 39 issues totaling $268.8 million. In 1990, the firm ranked second, with 23 deals totaling $194.1 million. Morgan Keegan had no presence as a financial adviser for Tennessee issuers in 1990 or 1991.
Last year, Cumberland Securities ranked 14th as an underwriter of Tennessee debt when full credit is given to book manager, with four deals totaling $35.2 million. In 1990, it ranked 12th, with 10 deals totaling $46.5 million.
In 1991, when full credit was given to book manager, Morgan Keegan was ranked fifth in Tennessee, with 16 financings totaling $151.1 million, up from 12th in 1990 with 10 financings totaling $46.5 million. Nationwide, it ranked 38th last year when full credit is given to book manager, with 124 deals totaling $773.7 million. This compares with a ranking of 34 in 1990, with 106 deals totaling $534.9 million.
