First Union Securities, the brokerage unit of First Union Corp., on Tuesday announced that it has agreed to buy First Albany Cos.' private client business for $100 million in cash.
The deal is slated to close in August.
The Charlotte, N.C., banking company has no strong presence in private asset management in the Northeast, said Daniel Ludeman, president and chief executive officer of First Union's securities brokerage group.
Buying the Albany, N.Y., business would give $254 billion-asset First Union about 90,000 accounts with $11.4 billion of brokerage assets. First Union Securities manages $175 billion of brokerage assets in 2.1 million accounts.
The deal would also give First Union 20 retail branches in New York, New Jersey, and New England.
The buyer said it would retain First Albany's 300 retail brokerage employees, who would increase to 7,100 the number of registered representatives working at First Union.
Analysts said the deal is consistent with the banking company's recent trend toward filling gaps in its business lines. However, Tom Burnett, president and founder of Merger Insight in New York, said it would not add a substantial dimension or asset base to First Union.
But he said the deal would be a good fit with First Union and that First Albany should be easy to digest. First Union is still widely perceived by Wall Street to be absorbing several transactions from recent years, Mr. Burnett noted.
Last year First Union bought Everen Capital Corp. for about $1 billion in a deal that made First Union the sixth-biggest broker-dealer in the country. Mr. Ludeman said acquisitions are not a key part of his company's strategy right now.
First Albany said it plans to use the proceeds from the sale to expand its investment banking, equity and fixed-income capital markets, and venture capital operations.
