NEW YORK CITY—RCS Capital Corp. saidTuesday that it had closed on its all-cash, $1.15-billionacquisition of Cetera Financial Group fromaffiliates of Lightyear Capital. ValerieBrown, CEO of El Segundo, CA-based Cetera, has been namedhead of RCAP's new retail advice platform, which will consist ofCetera and First Allied Securities along with other brands still tojoin the fold.

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First announced in January, the deal creates the second largestindependent financial advisor network in the US, adding some 6,632financial advisors and bringing RCAP's retail financial advisoryplatform to about 9,000 advisors. It gives RCAP a footprint in all50 states along with the District of Columbia and Puerto Rico, andbolsters its ability to serve some 2.5 million mass-affluent andhigh-net-worth investors by constructing durable investmentstrategies within a diversified investment portfolio.

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Nicholas Schorsch, RCAP's executive chairman,calls the deal “a watershed event for RCS Capital and the industryas a whole. Cetera will become the centerpiece of our financialservices strategy to construct and operate the best independentfinancial retail advice platform in the industry, and act as thehub of our integrated broker-dealer strategy.”

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The company's CEO, William Kahane, says thecompletion of the acquisition provides RCAP with “immediatebenefits and added capabilities. The substantially expanded scaleof our retail advice platform will help drive revenue growth andreduce costs through operational synergies. Additionally, weacquire powerful brand awareness.”

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Brown, who calls Cetera “the cornerstone” of the expandedplatform, will oversee a unit that will also includeInvestors Capital, Summit BrokerageServices and J.P. Turner & Co. whenthe acquisitions of these firms reach their respective closingdates. RCAP says all of these will be operated as independentoperating subsidiaries under separate brands and management, albeitwith shared back-office and support systems.

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RCS Capital, the investment-banking arm of RCAP, andBarclays acted as financial advisors to RCAP.Bank of America Merrill Lynch, Barclays andLuxor Capital Group provided financing to RCAP.Proskauer Rose LLP acted as legal advisor to RCAP,while Duane Morris LLP acted as counsel to thespecial committee of the board of directors of RCAP. BofA MerrillLynch acted as financial advisor to Cetera. Simpson Thacher& Bartlett LLP acted as legal advisor to Cetera andLightyear.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.