Shared UVA roots help seal merger

Cary Street Partners, based in Shockoe Slip, made an acquisition deal with an Atlanta firm. Photo by Michael Schwartz.

Cary Street Partners, based in Shockoe Slip, made an acquisition deal with an Atlanta firm. Photo by Michael Schwartz.

A Shockoe Slip financial firm’s latest acquisition is tinged with the colors of Wahoo blue and orange.

Cary Street Partners announced this week it is finalizing the purchase of The Breckenridge Group, an Atlanta-based investment banking firm. It will be Cary Street Partners’ third acquisition since 2007.

The firms did not disclose the financial terms of the deal. Breckenridge’s four principals will become partners in Cary Street and will share in the firm’s equity.

“The deal is done but for regulatory approval,” said Kip Caffey, Cary Street Partners’ managing director.

FINRA, the body that governs much of the investment industry, still has to approve the transaction. Caffey expects to receive the green light this week.

Caffey said the two sides began discussing a potential deal about 18 months ago. Many of the heads of both firms were familiar with each other as University of Virginia alumni.

Kip Caffey

Kip Caffey

Three of the four principals at Breckenridge Group graduated from UVA, as did several partners at Cary Street Partners, including Caffey.

In addition to the Cavalier ties, Caffey said his firm was drawn to the deal by the chance to expand its foothold in Atlanta. Cary Street Partners has had a small office there for about 10 years but not a significant presence. It will add 10 new employees through the deal.

“We think it just makes sense all around,” Caffey said. “I think it’s going to be a very successful transaction for all parties involved.”

Breckenridge will bring over a strong book of business in mergers and acquisitions, Caffey said. The company will look to continue to target transactions with a value of $25 million to $200 million.

Caffey said it’s difficult to predict how much the addition of Breckenridge will add to the combined firms’ bottom line, but that conditions for investment banking firms are favorable these days.

“There are wide swings depending on market conditions,” he said. “But right now we are in a very attractive market for our investment banking services.”

Cary Street Partners has budgeted about $20 million in revenue for 2014, Caffey said. About 70 percent of that is attributed to its wealth management division, and 30 percent comes from investment banking services. Its wealth management arm has about $2 billion in client assets under management.

The Breckenridge deal is Cary Street Partners’ first acquisition since late 2013 when it bought a wealth management firm in Texas. Its first purchase of a firm came in 2007 when it bought into the Fredericksburg market. That branch has become its largest in terms of revenue and profits, Caffey said.

“Acquisitions are an attractive way for us to grow the firm, and we are actively seeking additional wealth management acquisitions,” Caffey said.

It has expanded further by luring talent from other firms. That has given it offices in Abingdon, Va. Charlotte, N.C. and Johnson City, Tenn. It now has 11 offices in five states. Despite its geographical expansion, Caffey said Richmond remains the firm’s largest office with about 30 employees. Its headcount firm-wide is about 105.

Cary Street Partners, based in Shockoe Slip, made an acquisition deal with an Atlanta firm. Photo by Michael Schwartz.

Cary Street Partners, based in Shockoe Slip, made an acquisition deal with an Atlanta firm. Photo by Michael Schwartz.

A Shockoe Slip financial firm’s latest acquisition is tinged with the colors of Wahoo blue and orange.

Cary Street Partners announced this week it is finalizing the purchase of The Breckenridge Group, an Atlanta-based investment banking firm. It will be Cary Street Partners’ third acquisition since 2007.

The firms did not disclose the financial terms of the deal. Breckenridge’s four principals will become partners in Cary Street and will share in the firm’s equity.

“The deal is done but for regulatory approval,” said Kip Caffey, Cary Street Partners’ managing director.

FINRA, the body that governs much of the investment industry, still has to approve the transaction. Caffey expects to receive the green light this week.

Caffey said the two sides began discussing a potential deal about 18 months ago. Many of the heads of both firms were familiar with each other as University of Virginia alumni.

Kip Caffey

Kip Caffey

Three of the four principals at Breckenridge Group graduated from UVA, as did several partners at Cary Street Partners, including Caffey.

In addition to the Cavalier ties, Caffey said his firm was drawn to the deal by the chance to expand its foothold in Atlanta. Cary Street Partners has had a small office there for about 10 years but not a significant presence. It will add 10 new employees through the deal.

“We think it just makes sense all around,” Caffey said. “I think it’s going to be a very successful transaction for all parties involved.”

Breckenridge will bring over a strong book of business in mergers and acquisitions, Caffey said. The company will look to continue to target transactions with a value of $25 million to $200 million.

Caffey said it’s difficult to predict how much the addition of Breckenridge will add to the combined firms’ bottom line, but that conditions for investment banking firms are favorable these days.

“There are wide swings depending on market conditions,” he said. “But right now we are in a very attractive market for our investment banking services.”

Cary Street Partners has budgeted about $20 million in revenue for 2014, Caffey said. About 70 percent of that is attributed to its wealth management division, and 30 percent comes from investment banking services. Its wealth management arm has about $2 billion in client assets under management.

The Breckenridge deal is Cary Street Partners’ first acquisition since late 2013 when it bought a wealth management firm in Texas. Its first purchase of a firm came in 2007 when it bought into the Fredericksburg market. That branch has become its largest in terms of revenue and profits, Caffey said.

“Acquisitions are an attractive way for us to grow the firm, and we are actively seeking additional wealth management acquisitions,” Caffey said.

It has expanded further by luring talent from other firms. That has given it offices in Abingdon, Va. Charlotte, N.C. and Johnson City, Tenn. It now has 11 offices in five states. Despite its geographical expansion, Caffey said Richmond remains the firm’s largest office with about 30 employees. Its headcount firm-wide is about 105.

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