© 2019 SourceMedia. All rights reserved.

Focus Financial extends its acquisition hot streak

Focus Financial Partners is on an acquisition hot streak, adding its ninth firm in 12 months and its third since the aggregator went public in July.

Focus has diversified its portfolio as one of its partner firms, Buckingham Family of Financial Services, purchased the turnkey asset management provider Loring Ward Holdings for $235 million.

“This merger is one of the largest transactions in the history of Focus and is a consummate example of the type of firms we seek to attract and the value we add to our partner firms in the execution of their growth strategies,” said Focus CEO Rudy Adolf in a statement.

Although Focus said it would begin offering RIAs all cash deals in its first earnings call in August, Loring Ward received a 50% equity stake in the newly public company.

Loring Ward 9/28/18

Loring Ward will receive $117.5 million in cash and $117.5 million in Focus Class A common stock. Alex Potts, Loring Ward’s CEO, said he expects the transaction to close on November 30. Focus will pay $92.5 million then with installments of $12.5 million doled out at the six- and 12-month anniversaries of the close date. Focus may spend an additional sum depending on revenue growth in the six years following the deal’s close.

Loring Ward will add $17.2 billion in assets under management and broaden Focus’ outsourcing business. The firm, which was founded in 1990 in San Jose, California, has a network of more than 200 RIAs and 75 broker-dealers.

Combining Loring Ward with St. Louis-based Buckingham and its own affiliate turnkey asset management provider, BAM Advisor Services, will create an administrative, back-office and retirement-plan service provider that assists more than 300 registered investment advisors across the country.

“[Loring Ward and Buckingham] started on parallel tracks 20 years ago,” Potts said. “We both started businesses to help financial advisors. We were doing a lot of the same things just in different areas. We were more focused on broker-dealer advisors, whereas they helped more CPA advisors.”

Potts and Buckingham CEO Adam Birenbaum began seriously discussing merging the firms in June, but the pair were already friends at that point, having met several times through conferences, and had even talked about the idea in the past, Potts said.

“An advisor asked us about succession planning and we didn’t have a good succession planning process,” says Potts. “He told us Buckingham had a much better model, so I called Adam and started talking to him about it, and as we talked we realized that it made sense to come together. That’s the impetus of the whole thing. Maybe we were even slow and should have figured this out years ago.”

While Loring Ward will fold itself into BAM, the brand name will survive.

“Keeping both brands is very important to us, but we will run the TAMP as a cohesive unit within the company,” says Potts, who will now oversee the entire TAMP business while Birenbaum oversees Buckingham’s other half, Buckingham Strategic Wealth.

Nabbing Loring Ward is a big win for Focus, offsetting its weak organic growth – a sore point since the company went public in late July.

Shares of New York-based Focus closed Friday at $47.46, just shy of 4% higher than its closing price the previous day. (The deal was announced after trading ended Thursday evening.)

The holding company, which has preferred interests in more than 50 advisory firms in over 30 states, Canada, the U.K. and Australia, went public with shares priced at $33 on July 26 and is regarded as a proxy for the independent advisor business.

For reprint and licensing requests for this article, click here.