Buying Wheat First Butcher Singer Inc. should give First Union Corp. the equity underwriting savvy it needs to snare new business.

The Charlotte, N.C.-based bank has lost deals because customers want underwriters with expertise in their businesses, said Louis A. "Jerry" Schmitt, a managing director at First Union Capital Markets, the bank's section 20 subsidiary.

The $471 million deal "is going to supercharge what we're doing," he said.

First Union also had been hearing some grumbling from its existing clients. That prompted the $143 billion-asset banking company to ask regulators for underwriting powers, a right it was granted in June.

"The customer demand they had for equity underwriting products exceeded their capacity," said Stephen Biggar, a bank analyst with Standard & Poor's Equity Group.

When companies use an investment bank to issue stock, they often reward the new institution with future business.

"A lot of these regional banks have focused on middle-market, commercial customers," said Robert Becker, a securities analyst who covers bank stocks at Argus Research in New York. "As these companies grow, they may desire to go to the equity market for capital. The problem is that if you're the existing banker for that firm, you may lose the customer if somebody else does the equity underwriting."

Such was the case with First Union's mid-tier company client base, which is excited about the acquisition, said G. Kennedy Thompson, co-head of First Union Capital Markets.

"Our banking company has hundreds of thousands of relationships in the smaller-business line, under $50 million in revenue. The equity that Wheat First brings," he said, "matches really well with that customer base."

Buying Wheat First accomplishes in one move what First Union said in June would be a two-year plan to build an equities unit.

"We want to grow together with Wheat First, and even after we combine we will continue to hire people," Mr. Thompson said.

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