By Avik Das and Jessica Toonkel
Jan 16 (Reuters) - RCS Capital Corp on Thursdayannounced it would buy independent broker-dealer CeteraFinancial Group from private equity firm Lightyear Capital LLCfor about $1.15 billion in cash to expand its retail brokeragebusiness.
New York-based Lightyear Capital, which is run by formerPaine Webber Group Inc Chief Executive Officer Donald Marron,created Cetera in 2010 when it acquired three ING broker-dealers.
Over the years, Lightyear has continued to build Ceterathrough acquisitions. Just last year, it acquired two brokeragefirms from MetLife Inc. Today the firm provides broker-dealerand advisory services to about 6,500 independent financialprofessionals as well as financial institutions.
RCS, which has been an aggressive acquirer over the past fewmonths, approached Lightyear several times last year aboutbuying Cetera, Marron said. But it was not until right beforeChristmas that Lightyear took the offer seriously, he said.
"They said Cetera's management would remain as it is andthey asked if they could make a preemptive bid," Marron toldReuters in an interview. "Price is important to private equity,but also is the firm (so) its value is in Valerie Brown and herteam."
Cetera Chief Executive Valerie Brown will continue tooperate Cetera.
This is the fourth brokerage acquisition by New York-basedRCS Capital, which just went public in June, in the last fourmonths.
It bought Summit Financial Services for $49 million inNovember and Investor Capital Holdings for about $52.5 millionin October. It also bought Hatteras Funds Group in the samemonth for an undisclosed amount.
The company's investment banking arm and Barclays were its financial advisers, while Bank of America Merrill Lynch advised Cetera.
The transaction is expected to close in the later part of2014.
RCS Capital's shares were trading at $19.10, up over 3percent in late afternoon trading, the New York Stock Exchange.
Barclays (BARC)