Asset Disposition – Page 2 – My Market Wizard

Analyst Summary

B. Riley Securities Holdings, LLC converted into a Delaware corporation named B. Riley Securities Holdings, Inc. (BRS Holdings) and merged with Cascadia Investments, Inc., resulting in certain Cascadia investors becoming minority stockholders in BRS Holdings.
BRS Holdings granted restricted stock awards (RSAs) to management and employees, representing 10% of BRS Holdings’ common stock, subject to time-vesting requirements.
A pool of shares representing approximately 9.2% of BRS Holdings’ common stock was created for future equity-based awards to BRS management and employees.
BRS Holdings entered into a stockholders agreement, establishing a five-member board of directors with four members appointed by BR Financial Holdings LLC (BRFH), including two independent directors, and one director appointed by the BRS executive committee.
Andrew Moore and James Baker were appointed as Co-Chief Executive Officers of BRS Holdings.
B. Riley Financial owns 89.4% of the outstanding shares of common stock of BRS Holdings.
BRS will independently report financial results, providing enhanced transparency and the ability to independently value a pure-play investment bank focused on the small cap and middle markets.
BRS is well-capitalized and debt-free, positioning it to capitalize on an expected recovery in M&A and Capital Markets activity.

The carve-out transaction could positively impact B. Riley Financial’s stock price as BRS is expected to return to and eventually exceed historical levels of growth and profitability.
Enhanced transparency and independent valuation of BRS may lead to a more accurate reflection of its value in B. Riley Financial’s overall stock price.