First Union Corp. said Friday that it had agreed to buy JWGenesis Financial Corp., a brokerage firm in Boca Raton, Fla., for up to $110 million in cash, to expand its investment services business.

The acquisition would put a new twist on the business for First Union, which employs 7,000 registered representatives. JWGenesis has a network of 500 self-employed brokers.

Rather than focus on potential customers, the Charlotte, N.C., banking company portrayed the deal as a bid to appeal to as broad an audience of brokers as possible.

First Union employs brokers in 365 stand-alone brokerage offices in 43 states, and places brokers in many of its 2,400 retail branches on the East Coast. It also has Internet brokerage capabilities. But it has no affiliations with independent brokers, who run their own offices and use a firm like JWGenesis for clearing, research, and products.

JWGenesis would be managed as a separate National Association of Securities Dealers broker-dealer within First Union Securities.

First Union said independents are proliferating twice as fast as brokers at big securities firms. The deal "reflects our determination and capacity to offer financial advisers a variety of ways to work with or for First Union," said Daniel J. Ludeman, president and chief executive officer of the brokerage group at First Union Securities.

Analysts said First Union will likely continue to pick up small brokerage operations to build scale. The company has also shown a willingness to offer products from other companies through its brokers, rather than to rely on sales of its own investment products to get revenues.

"They want to become more of a distribution conduit than a manufacturer," said Christopher Marinac, an analyst at Robinson Humphrey in Atlanta.

First Union agreed to pay between $10 and $12 in cash for each share of JWGenesis, but the final price will depend on how many brokers stick around. First Union has a broader array of products for the JWGenesis brokers to sell, which was part of the appeal for doing the transaction, said Marshall T. Leeds, chairman and chief executive officer of JWGenesis.

The deal is scheduled to close early next year, pending approvals.

Retail and institutional brokerage has been a hot growth area for banks, which see the securities business as a source of solid revenues and of customer bases that can be combed for more cross-selling opportunities.

Earlier this summer UBS AG, the huge Swiss banking company, agreed to acquire PaineWebber Group for about $12 billion. The deal would substantially boost UBS' presence in the United States and its business with high-net-worth individuals.

Friday's deal would be First Union's third brokerage acquisition since 1998. Earlier this year it acquired the retail business of First Albany Corp. Before that it acquired the brokerage operations of Chicago's Everen Securities. And in a pre-1998 deal it acquired Wheat First Butcher Singer of Richmond, Va. All three have since been combined into First Union Securities.

Despite cost-cutting in some areas of the company, First Union has said it would continue to invest in high-growth areas. It has had a bumpy ride of late, issuing a string of profit warnings and disappointing results.

In June First Union announced a sweeping restructuring program that included the sale of its mortgage and credit card operations; the shutdown of its consumer finance unit, Money Store; and other cost cuts. The company said it would focus resources on its three core operations: traditional banking, investment management, and brokerage and investment banking services.


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