LPL Financial on Wednesday afternoon said it will acquire the wealth management arm of the struggling Waddell & Reed Financial Inc., which encompasses 921 registered reps and financial advisers and $63 billion in client assets. The deal is expected to close by the middle of next year.
It's an unusual, two-step transaction. LPL is paying $300 million for the wealth management group but only after Macquarie Asset Management closes its deal for the outstanding shares of Waddell & Reed, which was also announced Wednesday after the market closed.
Macquarie Group is acquiring all of the outstanding shares of Waddell & Reed for $25 per share in cash representing total consideration of $1.7 billion.
In October, Waddell & Reed's stock price jumped to a recent high on speculation that it was a takeover target. Waddell & Reed also owns the Ivy Funds, a leading manager of actively managed mutual funds, a struggling part of the asset management industry.
With almost 17,000 brokers and advisers, LPL has a long history of making large acquisitions. In 2017, LPL bought National Planning Holdings Inc., an independent broker-dealer network with 3,200 advisers.
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“LPL has evolved significantly over the last decade and still wants to scale up,” says one industry executive.
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