Raymond James Sees $420 Million Investment on Deutsche Bank Deal

  • Figure goes beyond disclosure in December announcement
  • Buyer says it has cash on hand to fund deal, incentives

Raymond James Financial Inc. said it expects an investment cost of more than $400 million in the company’s planned purchase of Deutsche Bank AG’s U.S. private-client services unit.

The final figure will depend on how many Deutsche Asset & Wealth Management advisers join Raymond James, the St. Petersburg, Florida-based buyer said in a regulatory filing Monday. Today’s document offers more detail than Raymond James’s disclosure in December that it will spend about 1.4 times revenue.

“Based upon the number of Deutsche AWM financial advisers as of Dec. 3, 2015, our total investment including retention incentives provided directly to financial advisers would approximate $420 million,” Raymond James said in Monday’s document. “At the present time, we have the ability to utilize our cash on-hand as of the closing date to fund the purchase obligation and retention incentives.”

The deal will add offices in the Northeast and mid-Atlantic region as Chief Executive Officer Paul Reilly works to expand through acquisitions. Deutsche Bank has been seeking to lower costs and improve the company’s return on equity.

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