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Stifel Financial Prepares for Brexit by Acquiring MainFirst

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Stifel Financial SF recently announced that it has entered into agreement to acquire MainFirst, a Europe-based firm specializing in equity brokerage and research, equity capital markets and asset management. Though the financial terms were not disclosed, deal is expected to close in first-quarter 2019.

The acquisition will likely help Stifel bolster its equity business in the U.K. market. Moreover, MainFirst’s full German banking license will allow Stifel to continue offering corporate advisory, brokerage and investment banking services and clear and settle secondary equity and fixed income trades post-Brexit.

“We are extremely pleased to partner with MainFirst, as we continue to make opportunistic investments in our business,” said Eithne O’Leary, President of Stifel Europe, a wholly owned subsidiary of Stifel.

He further added, “Given the evolving European regulatory environment and changing market dynamics, we will continue to pursue strategies that enable us to best serve current and future clients with a wider range of products.”

While Stifel is undertaking this acquisition to counter Brexit woes, other investment banks such as Goldman Sachs GS and Morgan Stanley MS, are busy moving staff and setting up new trading hubs in Frankfurt and Paris.

Lately Stifel has been involved in a number of buyouts. In October 2018, Stifel announced an agreement to acquire First Empire Holding Corp. and its subsidiaries, including First Empire Securities, Inc. an institutional broker-dealer specializing in the fixed income markets.

Further, in September 2018, it completed the buyout of Business Bancshares, which further enhanced the growing capabilities of Stifel’s bank and wealth management businesses.

Over the past three months, shares of Stifel have lost 9.1% compared with the industry’s decline of 6.7%. The stock currently carries a Zacks Rank #4 (Sell).

An investment bank worth considering is E*TRADE Financial Corporation ETFC, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

E*TRADE’s Zacks Consensus Estimate for current-year earnings has been revised 4.1% upward, over the past 30 days. Also, the stock has rallied 24.3% over the past year.  

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