Principal Financial to buy Hamilton; Dallas firm seeks a base in Midwest.

CHICAGO -- Dallas-based Principal Financial Securities Inc. plans to expand in the Midwest by acquiring Hamilton Investments Inc.

Principal signed an agreement on Friday to buy Chicago-based Hamilton Investments from Household International Inc., according to Thomas O'Toole, chairman and chief executive officer of Principal. He would not disclose the terms of the sale.

"Our strategic plan has been to expand in the Midwest for some time. This fits geographically and is also complementary with our lines of business," O'Toole said.

Principal, which focuses on investment banking and brokerage services, has 42 offices in 12 states, largely in the Midwest and Southwest. Hamilton, which has 25 branches in six Midwest states, provides securities brokerage and investment banking services.

O'Toole said the expected sale will not result in any staffing changes at any of the acquired Hamilton branches that will operate under the Principal name. "We would keep intact our branch offices," he said.

The deal will raise the number of Principal customer accounts to 195,000 from 93,000 and increase the number of brokers to 600 from 350, according to a press release.

O'Toole said the purchase of Hamilton could be completed by the end of the month, but that the sale will then be subject to approval from federal regulatory agencies and the New York Stock Exchange.

Anthony Fratto, vice president and manager of Hamilton Investments' public finance department in Chicago, said he does not think the planned purchase of the firm will affect its public finance operations. He said the expected purchase is an "exciting" opportunity that expand the firm's access to institutional investors.

In January 1990, Hamilton expanded its limited public finance operation when it hired three public finance executives who made up the public finance department at Chicago-based Rodman & Renshaw Inc.

Prospect Heights, Ill.-based Household said in a press release that it is selling Hamilton Investments because Household "doesn't need the full complement of Hamilton services to effectively serve its bank customers." Household provides consumer finance, banking services, insurance, and investment products.

Principal Financial Securities is a subsidiary of Des Moines-based Principal Financial Group, which has insurance and financial service holdings. Principal Financial Securities was rounded in Dallas in 1952 as Eppler, Guerin and Turner and became a Principal Financial Group subsidiary in 1986.

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