Raymond James Financial on Monday said it has completed its $1.2 billion acquisition of Morgan Keegan, making the St. Petersburg company one of the country's largest wealth management and capital markets firms not headquartered on Wall Street.
The deal, the largest in Raymond James' history, adds about 1,000 financial advisers to the 5,400 it already has, mostly in the United States and Canada.
The top 12 executives with Memphis-based Morgan Keegan have agreed to join Raymond James, along with 98 percent of the Morgan Keegan financial advisers who were offered retention incentives. Morgan Keegan Private Client Group offices will be co-branded as Raymond James/Morgan Keegan.
The deal is a huge financial boost to Morgan Keegan's previous owner, Regions Financial Corp. Regions will use the funds to help pay off $3.5 billion it owes through the federal Troubled Asset Relief Program.
Under original terms of the deal, Morgan Keegan was to pay a cash dividend of $250 million to Regions before the deal closed. But the parties mutually agreed to defer payment of the dividend until after the closing. That resulted in an increase in the book value of Morgan Keegan and, therefore, boosted the original purchase price estimate of $930 million.
After the closing, Raymond James will receive a cash dividend in the amount of $250 million from Morgan Keegan.