Glaves Securities Corp. and R.D. White & Co. announced yesterday they will merge to create a minority-owned firm specializing in municipal bonds and mortgage-backed securities.
The new firm, to be called R.D. White, Glaves & Co., is expected to be open for business on Jan. 1 and will initially have a staff of 23, including eight institutional sales professionals and seven investment bankers. Capitalization of R.D. White Glaves will be about $500,000 and the firm will have offices in both New York City and Wayne, N.J., said Howard L. Glaves, chairman and chief executive officer of the new firm.
Glaves Securities, founded last January, has established a presence as a minority-owned firm specializing in New Jersey issuers.
R.D. White, formed in 1937, specializes in the sales and trading of municipal bonds issued by New York State, its municipalities, and authorities. The firm, known for its work in the secondary marketplace, is unusual in that it mainly trades municipal securities and does not carry an inventory of bonds which it resells to customers.
"The combination of our two companies will provide our clients with a blend of investment banking expertise and distribution capacity," said Glaves, who is president and chief executive officer of Glaves Securities, a broker-dealer headquartered in Wayne. He will own 51% of the new company.
Richard V. Riccardi, president of New York City-based R.D. White & Co., will be R.D. White Glaves' president and chief operating officer.
"R.D. White Glaves & Co.'s combined experience and relationships with bond, funds, insurance companies, trust departments, money managers, pension funds, corporations, and high net-worth individuals will provide us with a wide and diverse range of both institutional and retail clients," Riccardi said in a release.
While Glaves will head the new firm, his name will follow R.D. White's to form the new firm. That's because Glaves Securities is not as well known as R.D. White, especially among institutional investors and in New York City, Glaves explained.
"R.D. White is a 55-year-old firm and has a strong presence in New York. I wanted to preserve that name," Glaves said. "R.D. White has more of a presence with institutional investors. It's less of a story to tell."
The merger will enhance the distribution capabilities of Glaves Securities, while augmenting R.D. White's sales strengths and giving the older firm a primary market presence and investment banking capabilities, Glaves said. "I have always thought I needed distribution to make the company grow," Glaves said. The merger "is clearly the quickest and most efficient" way to accomplish that.
The new company also hopes to expand by initially taking advantage of the opportunities available for minority-owned firms in the municipal bond and mortgage-backed securities industries.
Glaves Securities is ranked 165th among co-managers of municipal bond offerings in 1992, having served as a co-manager of six issues totaling $1.09 billion, when full credit is given to each manager, according to Securities Data Co.
R.D. White, primarily known as a secondary market distributor of tax-exempts, ranks 332d.
Before forming Glaves Securities, Glaves was a senior vice president at Kidder, Peabody & Co., where he spent 14 years. At Kidder, Glaves was a senior banker in the municipal finance group, a managing officer of the firm's asset finance group, and a senior banker in the real estate group.
Riccardi, who has spent 22 years in the municipal bond industry, was senior vice president and manager of the municipal bond department at Thomson McKinnon Securities.