Woodland Hills-based B. Riley Financial Inc. paid $2.8 million for more than 638,300 warrants that it originally issued in connection with its acquisition of Wunderlich Securities Inc. in 2017.
The repurchase of the warrants helps B. Riley “reduce potential dilution” of its stock as the warrants represent more than 2% of B. Riley’s 26.5 million total outstanding shares, according to Bryant Riley, B. Riley Financial’s chairman and co-chief executive.
When an investor exercises their warrant, they receive newly issued stock, rather than already outstanding stock. The warrants purchased by B. Riley Financial entitled holders to buy the company’s common stock at an exercise price of $17.50 per share, at any time prior to July 3, 2022.
B. Riley acquired Memphis, Tenn.-based Wunderlich Securities in 2017 in a $67 million cash and stock deal. This acquisition — along with its $160 million purchase of Arlington, Va.-based FBR & Co. that same year — created a multiregional brand for B. Riley, which merged the two firms with its own wealth management unit to form a new subsidiary dubbed B. Riley FBR Inc., which is headquartered in Sawtelle.