The combined company, forecast to exceed $6.5 billion in transactional volume, has a primary commercial loan servicing portfolio of more than $21 billion. With the deal done, the challenge will be the integration of 28 production offices, 100 producers and 100 investment analysts, Edward Padilla, NorthMarq CEO, tells GlobeSt.com of the restructuring for the 400-plus employee network.
The deal brings together like cultures that use the same capital sources and life insurance company lenders so the blending of the two isn't foreseen as "a huge leap. We're not changing historically the way they've done business. The issue will be getting people to share information," Padilla says.
The real estate investment banking division will operate under the NorthMarq Capital name, with its headquarters firmly planted in Minneapolis. The real estate consulting services operations will be called NorthMarq Advisors, with its homeport in Philadelphia--where LMRES was based and the long-awaited signing took place. NorthMarq's loan servicing group remains in Minneapolis and the acquired group's loan servicing stays in Miami for the time being. Lead executives are continuing to evaluate the merits of a single-city operations point, Padilla confides.
"The deal closed as arranged," Padilla says. That means Walt D' Alessio, formerly chairman and CEO of LMRES, is NorthMarq's vice chairman and will sit on the board of directors. Craig Butchenhart swaps out the president's seat at LMRES for the same post at NorthMarq and reports to Padilla as he leads the eastern operations and coordinates national production efforts.
"We can now offer a true national platform across multiple markets and provide more options with a broader knowledge base to our clients than ever before," Padilla said in a press release.
Butchenhart tells GlobeSt.com that it will take just months to assimilate the two organizations. "From my perspective, you have two successful companies ... and putting them together with one national platform creates tremendous opportunities for both the employees and the clients," he says. "We're looking forward to handing out our new business cards."
Padilla will be in Boston today to meet with Butchenhart and other lead executives. He then will take off on a whirlwind tour of offices that he's yet to visit.
In 1998, Legg Mason started courting NorthMarq's predecessor company, Northland Mortgage Co. The talks continued through the years, but didn't start to gel until about a year ago when NorthMarq made a proposal to wed its "west of the Mississippi" stronghold to LMRES' East Coast dominance.
The transaction includes only the mortgage banking, real estate consulting and servicing division of LMRES, owned by Legg Mason Inc. The two companies will retain the real estate investment advisory business for pension funds and other institutional and private investors. Legg Mason is a holding company that provides asset management, securities brokerage, investment banking and related financial services. LMRES was founded in 1954 and bought by Legg Mason in 1990.
NorthMarq Capital is a Marquette Financial Co. subsidiary founded in 1960 as Northland and acquired in 1998. The parent financial services organization is owned by the Pohlad family of Minneapolis.
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