Reuters: Mergers News: UPDATE 3-Brokerage LPL sets dividends, share sale

Reuters: Mergers News Reuters.com is your source for breaking news, business, financial and investing news, including personal finance and stocks. Reuters is the leading global provider of news, financial information and technology solutions to the world's media, financial institutions, businesses and individuals. // via fulltextrssfeed.com

UPDATE 3-Brokerage LPL sets dividends, share sale Apr 30th 2012, 15:06 Mon Apr 30, 2012 11:06am EDT * To pay quarterly dividend of up to 12 cents a share * Declares special dividend of $2 a share * Shareholders Hellman & Friedman, TPG Capital to sell 14.5 mln shares * Q1 adjusted EPS 56 cents vs Street view 54 cents April 30 (Reuters) - LPL Investment Holdings Inc, the largest U.S. independent brokerage, said its private-equity backers would sell about $540 million of stock in a public offering, and det ailed plans for a special dividend and quarterly dividends starting in the second half. The Boston company, a beneficiary of the movement by investors and brokers toward independent firms i n recent years, a lso reported better-than-expected quarterly earnings, fueled by recruiting and improving markets. LPL Chief Executive Mark Casady said the movement of advisers from traditional firms to independents was increasing. "The pipeline is strong," Casady said in a conference call. "Current conditions have resulted in us elevating our expectations for new adviser additions and related expense in the coming quarters." LPL added 115 net new advisers during the first quarter. Excluding 146 advisers who left after a merger integration last year, LPL has added 554 advisers in the past 12 months, Casady said. LPL ended March with 12,962 advisers, up 3.2 percent from a year earlier. The firm's low capital needs and rising revenue have led to a growing cash pile. LPL declared a special dividend of $2 a share LPL also said it would pay regular quarterly dividends, initially up to 12 cents a share, beginning in the second half. Shares of LPL closed Friday at $36.98 on the Nasdaq, up 21 percent this year. LPL said its two largest shareholders, private-equity investors Hellman & Friedman and TPG Capital, would sell 14.5 million shares in a secondary offering. Based on the stock's Friday closing price, those shares are worth about $540 million. The two investors, which led the 2005 buyout of LPL, will reduce their stakes from 31 percent each, on a fully diluted basis, to 23.8 percent each if underwriters issue shares to meet excess demand, according to an LPL filing. UBS brokerage analyst Alex Kramm said LPL's first-quarter revenue beat expectations thanks to higher commissions, but he wa rned before the opening bell that th e stock sale would weigh on the stock price. News of secondary sale, which represents about 14 percent of LPL's outstanding shares, sent LPL's stock price down 2.4 percent to $36.10 in morning trade. LPL sells technology, clearing and other services to self-employed brokers, who retain the lion's share of the fees and commissions they generate. The brokers pay their own overhead expenses. For the first quarter, LPL posted a profit of $41.2 million or 37 cents a share, down from $49.0 million, or 43 cents a share, a year ago, primarily due to charges related to debt refinancing. Excluding certain non-cash charges, the company earned 56 cents a share, topping analysts' average estimates of 54 cents, according to Thomson Reuters I/B/E/S. Revenue rose about 3 percent to a record $901.3 million. Analysts had expected $890.5 million. Advisory assets in LPL's fee-based platforms, which generate income regardless of investor trading activity, rose 11 percent to $110.8 billion. Total advisory and brokerage assets were up 7.3 percent to $354.1 billion. Link this Share this Digg this Email Reprints

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