LPL Financial Holdings Inc. LPLA entered into a definitive merger agreement to acquire Commonwealth Financial Network. The all-cash transaction is valued at roughly $2.7 billion.
Despite this, LPLA shares fell 2.9% in Monday’s trading session.
Per the agreement, LPL Financial will acquire 100% shares of Commonwealth Financial. The deal is anticipated to be completed in the second half of 2025, subject to requisite regulatory approvals and other customary closing conditions. The company intends to complete the integration in mid-2026.
Waltham, MA-based Commonwealth Financial, founded in 1979, is the largest independently owned wealth management firm in the United States. It offers integrated business solutions and services for roughly 2,900 financial advisors. As of Dec. 31, 2024, it had roughly $285 billion in assets under management (AUM) and client cash sweep balances of about $6 billion.
Upon the deal’s completion, Wayne Bloom, CEO of Commonwealth Financial, will join LPL Financial’s management committee and will continue to lead the Commonwealth community and their advisor experience. Further, he will collaborate with LPLA’s leadership team to launch LPLA’s office of Advisor Advocacy.
LPL Financial expects to finance this acquisition using a combination of corporate cash, debt and equity. In sync with this, the company announced a public offering of nearly 4.7 million shares at $320 per share, which is set to be closed on Apr 2, 2025. The primary purpose of this offering is to fund the acquisition of Commonwealth Financial. Any leftovers will be used for general corporate purposes. Also, LPLA intends to pause share buybacks to maintain a solid and flexible capital position.
This transaction is likely to expand LPLA’s advisor base and enhance advisory experience alongside AUM, strengthening its position as a leader in the independent advisory space.
Rich Steinmeier, CEO of LPL Financial, stated, “Commonwealth’s service philosophy enhances the value we’ll collectively bring to all Advisors across the LPL network. In addition, LPL’s advanced technology, intuitive business solutions and breadth of wealth management offerings unlock boundless potential for Commonwealth Advisors and the clients they serve.”
LPLA will likely incur roughly $485 million of one-time estimated onboarding and integration expenses, out of which nearly $155 million will be incurred for technology expenses.
The deal is anticipated to be accretive to LPLA’s 2026 adjusted earnings per share in the low single-digit range. Further, the company projects earnings before interest, tax and depreciation & amortization (EBITDA) accretion of approximately $415 million upon the completion of integration.
Also, LPL Financial aims to maintain pro forma net leverage within management’s target range of 1.5x to 2.5x.
This move aligns with the company’s inorganic growth strategy. In March 2025, the company acquired The Investment Center Inc., while it took over Atria Wealth Solutions in October 2024. These buyouts reflect its emphasis on LPLA’s efforts to expand its advisor base and wealth management services and capitalize on revenue and cost benefits.
