Tash Elwyn's job just got more complicated.

The new president of Raymond James & Associates sat in a conference room in late December in St. Petersburg, Fla., at his company's headquarters discussing his plans for his unit, now that he was assuming the mantle of leadership following the promotion of Dennis Zank. But that was just a few weeks before the parent company struck a deal with Regions Financial to buy its Memphis-based Morgan Keegan unit for $930 million.

"I have — very much in jest — said to a few folks that a week and a half ago it didn't appear it was going to be challenging enough and we needed to take it up a notch," Elwyn said. But that was before the historic deal was announced in mid-January. Now, he said: "There's going to be a lot of heavy lifting for many months to come."

Back in December when Elwyn was asked about whether there was a bigger growth target for RJA in 2012, he responded that the firm would "continue to place quality instead of quantity." In fact, he said it was the intention of Raymond James "not to morph into the biggest firm. Our goal has been to be the premier alternative to Wall Street." At the time, he also said: "I think the most significant challenge is first demonstrating and affirming what's NOT changing."

However, a great deal of change is coming to Raymond James. Call it the next step in its evolution. A small firm with southeastern roots, Raymond James just saw its footprint get a lot bigger with the potential to see its brand become significantly more prominent. And what does it mean in the long term for Tash Elwyn?

The entire Morgan Keegan private client group team — which includes its leadership, the branch managers and the 1,000-plus advisors (who are all in the employee channel) — will be operated as a separate unit.

And, Dennis Zank, recently promoted to chief operating officer at Raymond James Financial, will manage the integration of Morgan Keegan into Raymond James.

As for the deal itself, it will deliver $1.18 billion in proceeds to Morgan Keegan's parent company, Regions Financial. The deal includes a $930 million stock purchase agreement with Raymond James. Morgan Keegan will also pay a $250 million dividend to Regions before the deal closes. Regions will also indemnify Raymond James for Morgan Keegan's litigation issues, which is estimated at $210 million.

Raymond James also plans to pay up to $215 million in retention payments in a combination of cash and restricted stock units to certain Morgan Keegan employees. Those retention funds are set to include Morgan Keegan's management and brokerage and capital markets employees. RJ's private client group will total 6,147 with the deal, up from 5,113. And, RJA's FA force will be increased by 60%. Finally, Raymond James's ranking will jump to the seventh largest brokerage by assets under management with an estimated $326 billion, up from $256 billion.

The Real Deal
Several recruiters and consultants gave the deal favorable marks.

"They're not playing in the same ballpark as the wirehouses, but it's a ball park that they want to be in. They've found their niche in small towns...in a way more like an Edward Jones," said Manhattan-based recruiter Rich Schwarzkopf.

"The merger will work," added Los Angeles-based recruiter Mickey Wasserman, "unless they woefully underpay on a retention package. Everybody's taking a wait and see attitude right now, and I believe that there's a bit of relief that a private equity firm did not come into play. I think that this is a good marriage."

"It is a great buy for Raymond James, albeit at a steep price," said Charles "Chip" Roame, managing partner of Tiburon Strategic Advisors, the Tiburon, Ca.-based research and consulting firm. "While Raymond James will absorb much of the Morgan Keegan managerial infrastructure, complicated organizational structures like this have a way of clearing themselves up a year later as some people retire, move to companies, etc."

In fact, even though the Morgan Keegan employees will come in as a separate unit, that leaves the rest of the Raymond James employee channel to Elwyn. In a statement following the deal's announcement, he said: "Morgan Keegan offers a strong private client business, one of the industry's top fixed income groups, and a significant equity capital markets division. While an addition of this size is a departure from our focus on organic growth supplemented by individual hires and small acquisitions, it is not a departure from our overall strategy. We have used strategic mergers to grow throughout our history when the timing and pricing are right and, most importantly, when there is a strong cultural fit and clear path for integration."