Stifel CEO again bucks the trend in buying a workout firm


In buying 100 percent of bankruptcy workout firm Miller Buckfire this week, Stifel Financial Corp CEO Ron Kruszewski has taken another step to burnish his reputation as a contrarian investor.

Corporate bankruptcy filings have been in a multi-year decline and are off about 15 percent this year from a sluggish 2011. But after spending $40 million to buy a minority stake in Miller Buckfire last year, Kruszewski said on Thursday he was buying the rest of the firm as "the logical next step."

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St. Louis-based Stifel did not disclose terms of its investment.

Less than a month ago, Stifel said it will pay about $575 million to buy KBW Inc , a money-losing investment bank that specializes in the moribund sector of advising small banks on capital-raising and strategic deals.

"I always buck the trend," Kruszewski said in a November interview after announcing the KBW deal. "It's proven out in the past, though past is not prologue. But I tend to be a countercyclical person."

In the interview, Kruszewski said Stifel's initial investment in Miller Buckfire was "working out fine even though it's a down phase for restructuring."

Kruszewski, 53, has made more than 10 acquisitions in the past eight years, transforming Stifel from a small brokerage firm selling stocks and bonds to retail investors and raising money for municipalities into a burgeoning full-service firm for both retail investors and middle-market companies.

Kruszewski said scale matters in investment banking, and Stifel is "filling a void that has been created by the retrenching of larger firms since the financial meltdown of 2008."

Stifel, which earlier this month completed a $150 million debt offering, is likely paying for Miller Buckfire out of its cash on hand, David Trone, an analyst at JMP Securities, wrote in a note to investors. The acquisition should have minimal impact on Stifel's 2013 earnings "barring a sharp upturn in restructuring advisory work," Trone wrote.

Trone rates Stifel shares "outperform," with a price target of $38. Shares of the company were at $32.24, down 16 cents, in afternoon trading on the New York Stock Exchange.

(Reporting By Jed Horowitz; editing by John Wallace)