ATLANTA - About six weeks after losing most of its Atlanta municipals operation, Morgan Keegan & Co. is returning to Georgia with yesterday's announcement that it is buying Knox, Wall & Co.
Processing Content
Memphis-based Morgan Keegan's parent, Morgan Keegan Inc., said it expects to close its buyout of Atlanta-based Knox Wall by Aug. 1. Rumors of an imminent deal had been circulating around Atlanta for two weeks.
Knox Wall has been particularly active recently in underwriting Georgia school bond deals, especially with the advent of local sales tax elections in which school boards are seeking more money to build or replace schools. The firm has done a few deals in Florida, but its most lucrative niche is in its home state.
The acquisition comes not long after three of Morgan Keegan's four Atlanta municipal bankers in late May. At the time the company used the word "resignations," but managing director David Ramsey yesterday acknowledged that he was disappointed with business volume in Georgia and that the trio was effectively "let go."
But the timing of the departures was unrelated to Morgan Keegan's interest in buying a Georgia firm, Ramsey said. Knox Wall president Ed Wall and Ramsey said Morgan Keegan approached Knox Wall after the trio of bankers had left.
"We are a Southeast firm. It's absolutely impractical to be a factor in the Southeast without an Atlanta presence," Ramsey said.
Morgan Keegan's capital base should give Knox Wall the ability to pursue larger bond deals than it does now as a senior manager, he added. That means Morgan Keegan could funnel a healthier supply of Georgia bonds to its retail brokers in Atlanta and Athens.
The firm also looks to Knox Wall to generate more deals in Florida and South Carolina; Wall said bankers now on staff will continue to chase Florida business, but he expects to hire someone in South Carolina.
Also from Knox Wall's perspective, Morgan Keegan brings to the table expertise in corporate finance. Wall said he now will be able to, for example, recruit bank clients that need a fairness opinion on a proposed acquisition, or corporations considering an industrial development bond.
"It brought us a lot of diversity without a lot of overhead," he said.
As with several other Morgan Keegan acquisitions in the 1990s, Knox Wall will continue to operate under its own name and with its current staff, as a division of Morgan Keegan. Its north Atlanta office employs 19 people, including four bankers, four institutional sales representatives, and two traders. Wall said chairman Larry Knox will continue to oversee trading and sales.
The firm had been called W.L. Knox & Co. until last year, when several professionals - including Wall, fellow senior banker Gordon Mortin, and chief trader Steve Scott - came over from the now-defunct Bank South Securities Corp.
Last year, Knox Wall ranked sixth among senior managers on Georgia deals, while Morgan Keegan placed 15th. Nationally, Morgan Keegan placed 21st among book-runners and 32d among all co-managers in 1996, according to Securities Data Co.
Ramsey said he expects the remaining Morgan Keegan banker in Atlanta, Margaret Fox, to work at Knox Wall, although Wall said no decision has been made.
Since 1990, Morgan Keegan has bought seven broker-dealers and a trust operation in Southeastern cities such as New Orleans and Montgomery, Ala.
