Citizens Financial to pay $149M for capital markets firm

Citizens Financial Group is acquiring a San Francisco-based capital markets firm — the latest in a string of purchases by the Providence, Rhode Island, bank.

Citizens will pay approximately $149 million in cash to buy JMP Group, the $185 billion-asset bank said Wednesday.

JMP’s shareholders will receive $7.50 for each common share they own, according to the terms of the deal.

Kelvin Ma/Bloomberg

JMP provides investment banking services, including equity research, strategic advisory and sales and trading. It largely focuses on the technology, health care, financial services and real estate industries.

“We are adding a wealth of talented bankers as well as an institutional equities franchise that aligns well with our sector-focused corporate banking philosophy,” Donald McCree, Citizens' vice chairman and head of commercial banking, said in a press release. “The transaction brings us a strong platform based in San Francisco and New York, expanding both our range of services and our national presence.”

Nonbank acquisitions have long been a key component of Citizens’ strategy, and the deal for JMP Group is its second nonbank deal this year. The company recently bought Willamette Management Associates, a Portland, Oregon, firm that provides consulting services for corporate clients and the legal industry.

Citizens also announced in July that it would buy Investors Bancorp in Short Hills, New Jersey, its first bank acquisition since being spun off from the Royal Bank of Scotland in 2015. In May, Citizens said it would buy much of HSBC’s U.S. retail business, including $9 billion of deposits, $2.2 billion of loans and 80 East Coast branches.

The deal for JMP Group is expected to close in the fourth quarter, pending approval by JMP’s shareholders. The boards of directors of both companies have unanimously approved the transaction.

After the deal closes, JMP will operate as a wholly owned subsidiary of Citizens. Mark Lehman, currently president of JMP Group and CEO of JMP Securities, will lead the business.

Sullivan & Cromwell served as legal advisor to Citizens in connection with the transaction. Keefe, Bruyette & Woods and JMP Securities LLC served as financial advisors to JMP, and the law firm Mintz, Levin, Cohn, Ferris, Glovsky and Popeo served as legal advisor.