LaBranch & Company, an old-line firm and formerly a long-term NYSE specialist, has agreed to be sold to the Cowen Group for $193 million in stock.  Last year, LaBranche sold its NYSE specialist operations to Barclays Capital for $25 million.  These latest transactions are further indications of the industry's transition to electronic trading.

As negotiated, Cowen will issue 0.998 of a new Class A share (worth $4.71 as of Wednesday) for each of LaBranche’s shares - a 16% premium.  LaBranche shares were worth more than $50 in 2001.  LaBranche shareholders will own about 36 percent of the combined company.   LaBranche Chairman and CEO Michael LaBranche will become a Cowen senior managing director and join its board.  LaBranche director Katherine Dietze will join Cowen’s board, and LaBranche COO William Burke III will become a Cowen senior managing director.  The deal is expected to close by the beginning of the third quarter this year. 

Cowen was advised by Sandler O’Neill and Willkie Farr & Gallagher.  LaBranche was advised by Keefe, Bruyette & Woods and Weil, Gotshal & Manges.   [NYT Dealbook, 2/17]