U.S. Bancorp said Wednesday that it would buy the investment banking unit of asset manager John Nuveen & Co. for an undisclosed price.
The acquisition, which is expected to close in mid-August, would make U.S. Bancorp the nation's biggest lead underwriter of long-term municipal bonds, the bank said.
"We're getting a group of very high-quality people and a lot of strong client relationships," said Thomas Stanberry, the director of fixed-income capital markets for U.S. Bancorp's Piper Jaffray unit.
Aside from helping to bulk up its municipal bond operations, the transaction would bring 30 to 40 investment bankers, a roster of key clients, and two new offices, in Chicago and Houston.
Analysts applauded the deal, saying it fits with U.S. Bancorp's long- term goal of boosting its fixed-income business.
"This is absolutely a good move that expands U.S. Bancorp's capacity and adds several new markets," said James R. Bradshaw, an analyst with Pacific Crest Securities in Portland, Ore.
The deal also moves U.S. Bancorp Piper Jaffray into Alaska, where Chicago-based Nuveen has a relationship with an economic development and housing finance consultant.
The new unit would be folded into the fixed-income capital markets division of U.S. Bancorp Piper Jaffray, the banking company's brokerage, which was created last year with the purchase of Piper Jaffray Cos. and the boutique investment firm Libra Investments Inc.
Nuveen's vice president and manager of investment banking, Clif Fenton, would become co-manager of U.S. Bancorp Piper Jaffray's public finance department, based in Chicago. Mr. Fenton would share the title with the unit's current manager, Frank Fairman. Both would report to Mr. Stanberry.
U.S. Bancorp is likely to keep adding to its investment banking and securities brokerage operation, Mr. Stanberry said.
The Minneapolis-based company "will continue to look for opportunities to grow organically and through external acquisitions. We are expecting to grow where we can find a strategic fit," he added.
According to Thomson Financial Securities Data Co., U.S. Bancorp, with assets of $76.1 billion, managed 509 long-term municipal bond issues last year, totaling $4.0 billion.
Nuveen managed 61 deals last year, worth $1.1 billion.
Officials at Nuveen said it chose to sell its investment banking operations because of a shift toward serving affluent and high-net-worth clients. The firm manages or oversees more than $70 billion of assets.
"In recent years JNC has become increasingly focused on asset management, and our strategic energy needs to stay focused on achieving growth and accelerating our momentum in this area," said Nuveen chairman and chief executive officer Tim Schwertfeger.