FTN Financial has transition teams in place to integrate the technical and personnel aspects of its business following its acquisition of Spear, Leads & Kellogg's fixed-income division. FTN Financial is the capital markets division of First Horizon National, formerly First Tennessee National. FTN has agreed to buy SLK's fixed-income division, which comprised 183 employees, from Goldman Sachs for $150 million, according to an FTN official. Market participants had expected the divestment to be announced for some time as Goldman had been in discussions with First Tennessee and E*Trade Financial this fall (BW, 10/3).
FTN may relocate two to six senior managers from SLK's Jersey City, N.J., headquarters to FTN's office in midtown Manhattan, but expects to keep everybody else in their current locations, said Jimmy Hughes, president and ceo of FTN in Memphis. "There is no discussion of moving N.J. to Manhattan or vice versa. And, I'm being facetious, but no one has inquired about moving to Memphis," he quipped. Mark Medford, chief operating officer of FTN, noted FTN will now have additional offices in Atlanta, Philadelphia, San Francisco and Jersey City and SLK will not retain its name. "It is likely that, over time as the lines are dropped between the two firms, we will be adding people," he said.
Hughes said the current market conditions are enabling the firm to expand. "We're in a business of peaks and valleys... we saw a peak in 2003 and a valley in 2004. Most of our growth comes from work done during the valleys; when people are available you can hire them and that's when we add to our staff," he explained. Hughes added SLK was appealing because the two firms have similar cultures. "They have very little turnover with employees and a very similar platform of building relationships," he stated.
Medford highlighted SLK's electronic trading business and its ability to add different customers as key factors driving the acquisition. Hughes estimated SLK will add 1,500 customers to FTN. He said FTN is looking to continue to expand in the corporate market. "We've gained market share, but we're not yet where we want to be," he stated, declining to specify the firm's goals.