B. Riley Financial Inc. agreed to sell a portion of its wealth-management business to Stifel Financial for as much as $35 million in cash, the latest in a series of asset sales aimed at cutting the money-losing investment firm’s debt load.
The transaction doesn’t include B. Riley’s roughly 190 independent advisers or its 90 tax professionals, the company said in a statement Friday. The final price will be based on the number of advisers that make the move. As many as 50 of them — along with their associated customer accounts — are expected to join Stifel early next year.
The accounts moving held total assets under management of about $3.5 billion to $4.5 billion by Sept. 30.
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Shares of B. Riley have tumbled in recent years as its investments soured and U.S. authorities probed some of its business deals and disclosures. The Los Angeles-based firm also missed a deadline for filing its second-quarter financial statements, which are still pending. Chief Executive Officer Bryant Riley and his company have said there’s been no wrongdoing and they’re cooperating with authorities.
“The past year has proved disruptive to our wealth-management business, with competitors taking advantage of the noise surrounding our principal investments business,” Bryant Riley said in the statement. “We decided to take a proactive approach for those who wanted a fresh start and found a well-respected partner in Stifel.”
Shares of the company advanced 0.8% in early New York trading. They tumbled 72% this year through Thursday.
Last month, B. Riley struck two deals to raise cash, including divesting rights to its stable of consumer brands for $236 million. The company also agreed to sell a majority stake in its Great American business to funds managed by Oaktree Capital Management.
The asset sales could help B. Riley bolster its balance sheet as it wrestles with a debt load that totaled about $2 billion at midyear. The company suspended its dividend in August to put a priority on cutting leverage, and recently renegotiated its key loan with terms that included paying down the balance and terminating a revolving credit line.
