CHICAGO — Minneapolis-based RBC Capital Markets announced an agreement yesterday to acquire top Ohio broker-dealer Seasongood & Mayer LLC in a move that boosts RBC’s goal of increasing its edge in the nation’s top-issuing states.
Top management at both firms praised the union as one that serves the interest of both firms. In acquiring Seasongood, RBC is elevated to the position of the top underwriter in Ohio, the leader nationally of underwriting in the middle markets, and in the kindergarten-12th grade sector. The firms did not disclose the financial terms of the deal that would close in the second quarter of 2007 pending regulatory approval.
RBC would add to its staff Seasongood’s 30 public finance banking, sales, trading, underwriting, and other professionals in its Cincinnati and Cleveland offices with no layoffs of professionals, officials said. RBC currently has offices in Cincinnati and Cleveland with a professional staff of six bankers. Nationally, RBC has 34 offices that house 187 public finance bankers, 40 sales professionals, 44 traders and seven underwriters that make up the public finance team. RBC plans to keep Seasongood’s trading desk intact.
For Seasongood, RBC provides additional product lines it does not offer, including derivatives capability, public-private partnership advisory services, bank credit enhancement, and a global distribution network. At the same time, firm officials sought to reassure its solid, relationship-driven client base that it will remain the same firm in many respects as the firm will drop a name that has been a staple of the Ohio market for more than 100 years.
“We are proud of being number one in Ohio and we will still have the same presence in our hometown. We will still be Seasongood, just bigger and stronger,” said Todd Braff, a managing principal at Seasongood, which opened its doors in 1887. Braff said the firm’s eight senior managing principals were not looking for a buyer when RBC approached the firm, but grew interested after talking about a potential marriage.
Braff said Seasongood’s principals were impressed with RBC’s ability to successfully integrate firms it had previously acquired. And RBC’s management felt after talks that the two were a good fit because of their similar business models — pursuing both middle markets and large issuer deals. The transaction is the latest in a series of deals completed by RBC Capital Markets and its parent in the past nine months. The firm recently announced it would acquire New Jersey-based JB Hanauer & Co. In 2006 alone, RBC snapped up Atlanta-based Flag Financial Corp., New York-based Carlin Financial Group, Denver-based Daniels & Co., and American Guaranty & Trust of Wilmington, Del.
RBC has pursued an aggressive growth strategy in recent years, frequently announcing new hirers in its offices throughout the country as it seeks to meet a goal of ranking among the top firms in the top 15 issuing states. “From our standpoint, Ohio is an important state. Seasongood is the most important local firm, so it was not a very difficult decision,” to pursue the acquisition, said Larry Holtz, head of municipal markets at RBC.
“We are the only top-10 firm in the U.S. to have a physical presence in the state of Ohio, and this deal will bring the number of people we have on the ground there to over 100. Acquiring Seasongood significantly enhances RBC’s presence in K-12 finance, further strengthens our franchise as one of the leading municipal finance platforms in the United States, and aligns well with our culture and our strategy of having a local presence to serve clients,” Holtz added.
RBC ranked 9th last year among senior managers nationally, 12th in the Midwest and 10th in Ohio while Seasongood ranked first in Ohio, 15th in the Midwest, and 37th nationally, according to Thomson Corp.
“By combining Seasongood’s geographic leadership, advisory expertise and longstanding reputation in the marketplace with our strong national municipal finance platform backed by North America’s sixth largest bank, we can add significant value for our clients both nationally and within the state of Ohio,” said Chris Hamel, RBC’s head of municipal finance.
The deal also includes the acquisition of Seasongood Asset Management, which currently manages $1.5 billion in assets for public funds clients in the Ohio region. RBC plans to operate that business under the name RBC Public Fund Services as a joint venture between RBC Capital Markets and Voyageur Asset Management, a business unit of RBC Wealth Management.
