Ryan Beck wants its own ticker symbol. And who can blame the tiny regional brokerage after the recent wave of IPO successes enjoyed by rival U.S. brokerage houses?
The Florham Park, N.J., firm submitted for approval on April 17 an S-1 filing to the SEC requesting an initial public offering. The proceeds from the stock auction will be used to pay off some of the debt incurred by its parent BankAtlantic, a community bank in Ft. Lauderdale, Fla., in operating the brokerage. Ryan Beck plans to sell shares to the public to the tune of $100 million, according to the filing. The shares are expected to trade on the Nasdaq under the ticker RBCO. The price and number of shares to be issued, however, have yet to be determined.
“It’s a good time for them to try and go public,” says Phil Stiller, an IPO research analyst at Renaissance Capital in Greenwich, Conn. “M&A activity has been very strong. And the brokerage business has done well recently.”
The move comes on the heels of a similar step by French bank Societe Generale, which filed to spin off Cowen & Co. in March. Indeed the IPO market has been sizzling of late. In February, San Francisco-based Thomas Weisel raised $90 million in an IPO. The stock, which was priced at $15 a share, has been well received on the Street, rising nearly 35 percent to $20.48. Shares of Thomas Weisel ballooned despite reporting a $14.2 million loss in the first nine months of 2005. And in May 2005, investment bank Lazard raised $855 million with its $25 offering, the largest IPO for a securities firm since Goldman Sachs went public in 1999. Shares have nearly doubled to $45.95.
Ryan Beck has hired J.P. MorganChase to lead-manage its IPO while Ryan Beck will serve as its sole co-manager on the deal. One analyst said that BankAtlantic will likely maintain majority ownership of Ryan Beck following the offering—two classes of shares with different voting rights are planned and a portion of the IPO proceeds will go to fund a dividend payable to BankAtlantic shareholders.
This isn’t the first time Ryan Beck has bellied up to the public offering table. In 1986, Ryan Beck & Co. went public at $15.25 a share, raising $30 million through Merrill Lynch underwriters. Ryan Beck remained a public company until 1998, when BankAtlantic purchased it for $35.9 million. A curious union, many speculated at the time given their geographic and cultural differences, but the hope was that each firm would be able to cross-sell each other’s products, boosting revenue for the parent. But that chemistry never materialized. At the very least, BankAtlantic now stands to gain a handsome profit from the IPO.
Founded in 1946, Ryan Beck houses 424 retail brokers out of 1,100 employees and 123,771 customer accounts with assets of $18.6 billion, according to the Securities Industry Association.
The infusion of capital could propel them to new heights, especially with favorable market conditions at their back, Stiller says. BankAtlantic is likely to maintain a majority stake in the firm and sell off some shares at the IPO. Typically, the parent will retain roughly a 50 percent share, he says.