Invest Financial Corp. appears to have snared a smaller third-party marketer.
Competitors and other industry players said Invest had the inside track in the bidding on Specialized Investments Division, which is owned by SunAmerica Inc. of Los Angeles.
C. Roger Allen, president of Specialized Investments, said Tuesday that a letter of intent had been signed, though he declined to name the successful bidder. "It's going to be the first of next week before we're able to discuss anything," he said.
Sean Casey, senior vice president of business development at Atlanta- based Specialized Investments, confirmed that the company had talked to Invest, as well as to other major third-party marketers, including Primevest Financial Services Inc.
A spokesman for Tampa-based Invest, which has 127 bank clients, declined to comment, as did Primevest of St. Cloud, Minn., which has 675 bank clients.
A deal for Specialized Investments, which has 65 bank clients, would be a boon to either firm. Third-party marketing firms set up brokerages for banks that are too small to own or run one, or don't want to.
But competition for bank clients is fierce, as firms battle to keep clients and solicit new ones. In 1996, 8,300 banks did not offer brokerage services. This total dropped to 7,500 in 1998, according to American Brokerage Consultants of St. Petersburg, Fla.
Deals among service providers occur because "one marketing company can generally absorb another within its current operating structure, which helps reduce costs per institution," said Richard Ayotte, a consultant at American Brokerage. It also helps the marketing firm reach critical mass and expand operating margins, he said.
SunAmerica stands to benefit by unloading some costs, observers said. "On the other hand, it is certainly not a big part of SunAmerica's earnings or balance sheet," said Charlotte A. Chamberlain, an analyst at Jefferies & Co. of Los Angeles.
Nonetheless, she said, "it makes sense" to sell Specialized Investments because third-party marketing is not part of SunAmerica's core business.
Still, the decision to sell came as a surprise, said Mr. Casey, who was hired in August to drum up business for Specialized Investments. Mr. Casey, who moved to Atlanta from Columbus, Ohio, said he was told the company was for sale on the day that he closed the deal for his house in Atlanta.
"I was never given a logical reason why it was being done," he said.
A spokeswoman for SunAmerica declined to comment.
Meanwhile, some said a potential deal with Invest, which is viewed by observers as the front-runner, could be affected by its talks with the National Association of Securities Dealers Inc. Last month, Invest said it was in formal talks with the regulatory agency over supervisory procedures.
A spokeswoman for the NASD declined to talk about specific cases but said generally that the agency reviews all management changes at member firms.
Specialized Investments is a division of Financial Services Corp., which SunAmerica bought last year. American International Group Inc., of New York, agreed in August to buy SunAmerica.
