Stifel to buy former Lehman brokerage from Barclays

(Adds analyst quotes, updates shares)

By Richa Naidu and Jed Horowitz

June 8 (Reuters) - U.S. investment bank Stifel Financial (NYSE: SF - news) Corp said on Monday it would buy Barclays Plc (LSE: BARC.L - news) 's U.S. wealth and investment management unit, which is largely made up of the former brokerage arm of Lehman Brothers.

The deal value was not disclosed, but Barclays said the sale would have minimal financial impact. (http://bit.ly/1F3YltV)

Stifel is hoping to bring on board the unit's 180 advisers, who manage about $56 billion from offices in 12 cities.

This compares inauspiciously with the 250-300 advisers that Barclays executives said were working a year ago. A spokesman declined to specify historic numbers.

Depending on the number of advisers who ultimately join Stifel, the deal could contribute $200-$325 million to revenue, Stifel Chief Executive Ron Kruszewski said on a conference call.

Kruszewski has paid relatively low prices to buy companies in the past, but often provides generous packages to retain their employees.

In talking up the complimentary "entrepreneurial" cultures of the firms during the call, Kruszewski appeared to be speaking as much to Barclays brokers as to the financial community.

Stifel will be allowed to exclusively sell certain Barclays-underwritten stock and bond offerings to retail investors, a major business of many of the Barclays brokers.

"At the mid-point of guidance, it appears this transaction could be double digit percent accretive to 2016 EPS," Wells Fargo Securities analyst Christopher Harris wrote in a note, but he added that this depended on adviser retention.

St. Louis-based Stifel, a once low-key firm specializing in municipal bonds, is now a national presence serving individual investors and middle-market companies.

Kruszewski, who became CEO in 1997, has bought several, mostly troubled, retail brokerage and investment banking firms since 2005.

Stifel closed the acquisition of Alabama-based Sterne Agee Group for about $150 million on Friday. S&P Capital IQ analyst Ken Leon said Sterne Agee would likely generate $300-$325 million in revenue, raising his target price by $5 to $65.

Sources told Reuters in May that Barclays was reaching out to potential buyers for its U.S. wealth business.

Kruszewski said Stifel would cut costs by combining some back-office operations and closing branches where the firms have duplicate locations.

Stifel said it expected pretax margins of between 20-25 percent after amortization of retention, and that it would issue between 1 million and 2 million shares.

The deal is expected to close in November, Stifel said.

Stifel's shares were up 0.7 percent at $57.45 in early afternoon trading. (Reporting by Richa Naidu in Bengaluru; Editing by Saumyadeb Chakrabarty, Savio D'Souza and Ted Kerr)