Chicago Stock Exchange (CHX) specialist Dempsey & Co. has inked an agreement with cross-town trading firm William Blair & Co. to jointly manage the specialist business of Dempsey and the CHX book recently sold by Raymond James & Associates.
The newly-created Dempsey Blair & Co., which follows a courtship of several months between the two firms, will be run as a subsidiary of both firms.
Dempsey Blair will handle more than 250 stocks, including 50 over-the-counter issues.
Respected
"Dempsey has a respected reputation as one of the leaders at the exchange," said John Kayser, William Blair's chief financial officer.
"I've been exposed to the CHX, and seen the great business the exchange has had in the last eight months. This is a great opportunity for us," he added.
Dempsey Chief Executive Lou Klobuchar Jr. was named chief executive of Dempsey Blair, and will oversee the specialist unit's 16 traders.
"I've gotten to know Lou [Klobuchar Jr.] well. He's a smart, hardworking guy. He was the logical choice to run this operation," Kayser said.
Dempsey had previously managed its own CHX specialist book, employing 12 traders covering more than 150 stocks.
William Blair, a full-service brokerage making markets in 185 Nasdaq and OTC securities, had no previous affiliation with a CHX specialist.
The deal was finalized late last month.
Operation
Technically, the acquisition of Raymond James' CHX specialist book of roughly 100 stocks was made by William Blair, which then merged the operation with Dempsey's CHX book of 150 stocks to create Dempsey Blair, Kayser said.
Terms of the deal were not disclosed.
Michael Barone, head of Nasdaq trading at William Blair, said the deal will not change how stocks are traded at his firm.
"The upstairs business at William Blair will not change," Barone said. "The Nasdaq business at Dempsey Blair will be a lot different from ours."
"That doesn't mean we won't ever deal with them. We're affiliated, but the structure of our trading department won't change," he added.
Klobuchar said no layoffs are planned as a result of melding the two operations.
