capabilities, Wells Fargo & Co. said it has agreed to acquire Ragen MacKenzie Inc. for about $242 million in stock.

The deal for the Seattle-based regional brokerage, announced late Tuesday, would give $205 billion-asset Wells Fargo $11 billion of managed assets, 32 offices in Washington and Oregon, and 68,000 clients across the Pacific Northwest.

The acquisition of one of the few remaining independent brokerages in the Pacific Northwest may also help Wells rebuild its image in the region, where it suffered after its hurried 1996 merger with First Interstate Bancorp. caused significant customer defections in Oregon and Washington.

"Wells is trying to rebuild its brand name out here, and Ragen has a very good reputation throughout the West," said James R. Bradshaw, an analyst at Pacific Crest Securities in Portland, Ore.

The deal is the second this week in which a commercial bank is to buy a securities firm. On Tuesday, Chase Manhattan Corp. said it would purchase San Francisco-based Hambrecht & Quist Group Inc.

The price tag on Chase's deal is nearly six times that of Wells Fargo's pact for Ragen MacKenzie. And though Hambrecht & Quist specializes in initial public offerings for emerging technology and health-care companies, Ragen MacKenzie focuses primarily on retail brokerage.

As such, it is a better fit for Wells Fargo than an investment bank would be. President and chief executive officer Richard M. Kovacevich has said that investment banking is not in the cards for his company because of the vast difference in business cultures. The ability to offer additional products to retail and commercial customers is more important, he said.

However, Ragen MacKenzie has a small investment banking practice that Wells intends to expand, said Dennis J. Mooradian, president of Wells Fargo's private client services operation. "By growing the investment banking operation from within, we think we can avoid the culture clashes that Dick is concerned about."

The deal would also bring Wells a strong equity research department, Mr. Mooradian said. "We can take a great leap forward in associating ourselves with this group of talented investment professionals. It would take a lifetime to accomplish this if we tried to do it one by one."

Analysts were somewhat surprised by Wells' bid for Ragen MacKenzie. Mr. Bradshaw at Pacific Crest said the brokerage is behind the curve from a technology standpoint. Wells Fargo, with its top-rated Internet banking service, is considered a bank leader in technology.

"It's not a great philosophical fit," he said. "Wells really likes the high-tech, on-line approach, while Ragen has been pretty slow to evolve to that."

Regardless, analysts said that the acquisition, though relatively small, should benefit Wells Fargo by beefing up the menu of products it can offer to wealthy customers.

Mr. Mooradian said that half of the 10 million households served by Wells Fargo invest a portion of their income, but only 5% use the banking company's services to do so.

In addition, the acquisition fits with the company's strategy to do relatively small deals that fill in its franchise but do not dilute earnings. The deal calls for an exchange of $18.75 worth of Wells Fargo stock for each share of Ragen MacKenzie. The total price is roughly 2.08 times the brokerage's book value. Analysts said they considered this relatively inexpensive.

"This is a classic Wells deal," said Joseph K. Morford, an analyst with Dain Rauscher Wessels in San Francisco. "It's a niche regional play that should be easy to digest and shouldn't affect their numbers."

Word about a potential sale of Ragen MacKenzie started circulating soon after the brokerage went public in June 1998. Cleveland-based KeyCorp and Washington Mutual Inc. of Seattle are both said to have examined Ragen MacKenzie's books.

Lesa Sroufe, Ragen MacKenzie's chief executive, said in an interview that the brokerage's customers will "appreciate the access to trust services, corporate executive services, asset management, and private banking services" that would come with the Wells deal.

Lazard Freres & Co. advised Ragen MacKenzie in the deal. Wells Fargo handled it internally but got some aid in the due diligence process from Bear, Stearns & Co., Mr. Mooradian said.

The deal is expected to close in mid-March.

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