CHICAGO - The management of Dougherty Dawkins Inc. would buy control of the company for $13.9 million under an agreement in principle announced on Friday with its parent, Allied Group Inc.
Dougherty Dawkins Inc. owns the Minneapolis-based investment banking firm of Dougherty, Dawkins, Strand & Bigelow Inc. and Voyageur Fund Managers, an asset-management subsidiary.
Allied Group agreed to the deal with a management team led by Michael E. Dougherty, president of Dougherty Dawkins Inc., in order to focus on its core operations of property-casualty insurance. Dougherty said Friday that the management team is in the process of being formed.
Wendell Crosser, assistant vice president at Allied, said the sale was propelled by anticipated new regulations involving higher capital requirements for insurance firms that own non-insurance operations.
"Dougherty Dawkins is a high-quality bond house," Crosser said. Allied "is basically an insurance company and there is no strategic reason to own Dougherty Dawkins."
The sale is expected to be wrapped up in about three or four months, he said. A press release from Allied says the remaining hurdles include negotiation of a definitive agreement, approval by Allied's board of directors, completion of financing arrangements by Dougherty Dawkins management, and approval by the shareholders of the investment companies that use Voyageur Fund Managers as an investment adviser.
Dougherty, who is chairman of Dougherty, Dawkins, Strand & Bigelow as well as president of Dougherty Dawkins, said he was "thrilled" with the agreement.
"We're back to our roots. Everybody is excited," he said. "We have aggressive growth plans. This [purchase] will assure it will be done." Dougherty has resigned as a director of Allied Group.
Dougherty, Dawkins, Strand & Bigelow has offices in Denver; Naples, Fla.; Des Moines; Portland, Ore.; Sioux Falls, S.D.; and Salt Lake City.