Raymond James Financial, Inc. · NYSE:RJF
Raymond James Financial — Merger or Acquisition (January 2012)
17 slides from Raymond James Financial's merger presentation, Jan 12, 2012
Slide 1: Raymond James + Morgan Keegan Acquisition Summary
RAYMOND JAMES + MORGAN KEEGAN ACQUISITION SUMMARY January 12, 2012 1 © 2012 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC © 2012 Raymond James Financial Services, Inc., member FINRA/SIPC Raymond James® is a registered trademark of Raymond James Financial, Inc. Paul Reilly Ray
Slide 2: Safe Harbor Disclosure
SAFE HARBOR DISCLOSURE This presentation contains forward looking statements within the meaning of the Private Securities Litigation Reform Act. You are cautioned not to place undue reliance on forward - looking statements that speak only as of the date on which they are made. Forward - looking stat
Slide 3: Strategic Rationale
3 STRATEGIC RATIONALE This transaction represents a combination of two powerhouse regional firms with consistent performance and shared values. • We believe the combination creates enhanced earnings power. • Strong cultural fit: both companies have a conservative, client - centric focus. • The combi
Slide 4: Overview of Morgan Keegan
Key Facts • Headquartered in Memphis, TN • Founded in 1969; acquired by Regions Financial in 2001 • Principal business lines include: • Private Client Group • Fixed Income Capital Markets • Investment Banking (Public Finance and Corporate Banking) • Equity Capital Markets • Select statistics • $80 b
Slide 5: Transaction Highlights
5 TRANSACTION HIGHLIGHTS Purchase price • $930 million, representing a $230 million premium to tangible book value Purchase price adjustment • Dollar - for - dollar adjustment to the extent that tangible book value at closing is not $700 million • Purchase price reduction if certain revenue retentio
Slide 6: Strategic Rationale: Strong Cultural Fit
6 STRATEGIC RATIONALE: STRONG CULTURAL FIT Both Raymond James and Morgan Keegan Share Core Values : • Conservative, long - term focus • Client centric • Financial advisor based • Open architecture with broad product offerings • Cost - conscious culture • Above - industry average associate tenures
Slide 7: Strategic Rationale: Private Client Group
7 STRATEGIC RATIONALE: PRIVATE CLIENT GROUP High Quality PCG Business • Morgan Keegan’s PCG business has over 1,000 financial advisors with client assets totaling approximately $70 billion*. • Acquiring Morgan Keegan increases Raymond James’ employee financial advisor count by approximately 60%. • S
Slide 8: Private Client Group: Assets Under Administration
Private Client Group: Assets Under Administration 8 STRATEGIC RATIONALE: PRIVATE CLIENT GROUP Rank Firm AUA ($ bn) FAs 1 Morgan Stanley Smith Barney $1,600 17,921 2 Bank of America/Merrill Lynch GWM 1,539 17,817 3 Wells Fargo & Co. 1,100 15,188 4 UBS 724 6,913 5 Edward Jones & Co. 557 12,314 6 Ameri
Slide 9: Strategic Rationale: Fixed Income
9 STRATEGIC RATIONALE: FIXED INCOME Premier Complementary Fixed Income Franchises The combined firm is expected to: • Be a leading fixed income capital markets franchise in Municipal and Taxable Sales & Trading with a focus on middle market depository clients and other institutional investors. • Be
Slide 10: Strategic Rationale: Fixed Income - Public Finance
10 STRATEGIC RATIONALE: FIXED INCOME Premier Complementary Fixed Income Franchises In Public Finance: • Morgan Keegan was the 9 th ranked* municipal bond underwriter for the two years ended 2011, and 5 th ranked in the southeast. • The combined pro forma league table ranking would be 8 th (ranked by
Slide 11: League of Top Municipal Underwriting Firms
11 STRATEGIC RATIONALE: FIXED INCOME League of Top Municipal Underwriting Firms Raymond James + Morgan Keegan Source: Thomson Reuters 1/1/10 – 1/10/12 Rank Firm Par Amount ($ bn ) Market Share (%) # of Issues 1 Citi 95.5 13.3 807 2 Bank of America Merrill Lynch 95.3 13.3 945 3 J P Morgan Securities
Slide 12: Strategic Rationale: ECM
12 STRATEGIC RATIONALE: ECM Strong Investment Banking and Equity Research Franchise • Both firms possess award - winning research departments, which focus on small and mid - cap companies. • Joint underwriting distribution capability is strengthened by a larger combined institutional and PCG franchi
Slide 13: Strategic Rationale: Financially Compelling
13 STRATEGIC RATIONALE: FINANCIALLY COMPELLING Substantial Upside Potential Not Factored Into Base Forecasts: • Improved equity markets and health of overall economy • Steepening of yield curve will benefit fixed income results • Pick - up in equity volumes will accelerate PCG growth • Increased sho
Slide 14: Summary of Financing Plan
14 SUMMARY OF FINANCING PLAN Sources ($ mm) Uses ($ mm) Debt issuance $600 Purchase Price $ 930 Equity $300 Transaction/Integration charges* $50 Internal Cash $ 220 Cash retention payment** $140 Total $ 1,120 Total $ 1,120 * Includes professional fees, severance and one - time contract termination f
Slide 15: Pro Forma Metrics
PRO FORMA METRICS 15 RJF 9/30/11 ($ mm) RJF + MK 9/30/11 ($ mm) Balance Sheet Assets $18,007 $20,873 Liabilities 15,095 17,707 Equity 2,588 2,842 Tangible equity 2,516 2,540 Leverage Ratios Long - Term Debt $612 $1,212 EBITDA 535 679 Debt / EBITDA 1.14x 1.79x Income Statement ( 1 ) Revenues $3,400 $
Slide 16: The Premier Alternative to Wall Street
RAYMOND JAMES + MORGAN KEEGAN 16 SCOPE AND SCALE OF SERVICES CULTURE: SERVICE/CLIENT ORIENTATION WIREHOUSES BOUTIQUES REGIONALS CUSTODIANS THE PREMIER ALTERNATIVE TO WALL STREET RJF + MK INDEPENDENTS
Slide 17: Raymond James + Morgan Keegan Acquisition Summary
RAYMOND JAMES + MORGAN KEEGAN ACQUISITION SUMMARY January 12, 2012 17 © 2012 Raymond James & Associates, Inc., member New York Stock Exchange/SIPC © 2012 Raymond James Financial Services, Inc., member FINRA/SIPC Raymond James® is a registered trademark of Raymond James Financial, Inc. Paul Reilly Ra
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