D.A. Davidson & Co. to Acquire Mutual of Omaha's Regional Investment Firm,...

GREAT FALLS, Mont. -- Brokerage to Gain Diversity, Depth in Bond Offerings, Trading Capabilities

D.A. Davidson & Co., the largest full-service investment firm headquartered in the Northwest, today announced it has signed a definitive agreement to acquire the assets of the Kirkpatrick

The acquisition will cement D.A. Davidson & Co.'s reputation as a capital markets operation with strong public finance expertise and enhances the firm's fixed income trading and sales capabilities. The transaction is scheduled to close by Dec. 31, 2004.

The acquisition includes the assets of Kirkpatrick, Pettis, Smith, Polian Inc. and Kirkpatrick Pettis Investment Management, Inc. as well as the stock of Kirkpatrick Pettis Capital Management, Inc. All are subsidiaries of Mutual of Omaha.

The widely recognized Kirkpatrick Pettis name will continue following the transaction as a division of D.A. Davidson & Co.'s Fixed Income Capital Markets Group. Kirkpatrick Pettis' equity investment advisory services will be combined with Davidson Investment Advisors. D.A. Davidson & Co. and Davidson Investment Advisors are subsidiaries of Davidson Companies, an employee-owned financial services holding company.

The acquisition creates a combined fixed income business with approximately 130 employees and estimated revenues of $38 million. More importantly, the transaction will allow D.A. Davidson & Co. to provide clients with a broader array of fixed income products and services. The firm's clients are both individual and institutional investors, including pension plans, corporations, insurance companies, banks and other financial services companies.

"This transaction is about providing our clients with the expertise and professionalism they deserve," said Bill Johnstone, President and CEO of Davidson Companies. "The combined strengths of our firms, coupled with a presence in key fixed income markets, means we can offer our private client, institutional and government clients a broader array of financial solutions and services to meet their needs. We welcome our new Davidson Companies employees and look forward to working together as a team."

"This transaction supports Mutual of Omaha's strategy of focusing on its core insurance products, while ensuring that Kirkpatrick Pettis clients continue to receive the excellent service they have come to expect," said Mutual of Omaha President Dan Neary. "D.A. Davidson is an excellent firm whose history, mission and values align with those of Kirkpatrick Pettis and Mutual of Omaha, making this an excellent fit for both companies."

With the addition of approximately 90 Kirkpatrick Pettis employees, Davidson Companies will have an estimated 825 full-time employees. The acquisition also greatly expands Davidson Companies' operating markets -- which have been in seven Western states -- to a broader regional reach.

"In approaching this transaction, we worked to ensure that it provided good options for Kirkpatrick Pettis employees as well as the assurance of continued excellent service for Kirkpatrick Pettis clients. I believe we have achieved our goal," said L.C. "Jack" Petersen, President and CEO of Kirkpatrick, Pettis, Smith, Polian Inc.

"This is a great acquisition that will benefit both clients and shareholders," said Ian B. Davidson, Chairman of Davidson Companies and D.A. Davidson & Co. "Jack Petersen has been an industry friend of mine for several years. He is a man of integrity who, along with Sam Doyle and others, built KP into a leading regional investment firm."

D.A. Davidson & Co. will continue to operate from its established fixed income offices in Great Falls, Montana (the company's headquarters), Seattle, Portland, Spokane and Bozeman, Montana. In addition, the firm operates brokerage offices in Montana, Colorado, Idaho, Oregon, Utah, Washington and Wyoming. The firm will retain the existing Kirkpatrick Pettis offices in Omaha, Nebraska; Denver; Pittsburgh; Chicago; Kansas City; Orlando; Lincoln, Nebraska; and Norman, Oklahoma.

With Kirkpatrick Pettis operating as a division of D.A. Davidson & Co.'s Fixed Income Capital Markets Group, the firms can benefit from the name recognition achieved by both firms in their respective markets. Jointly overseeing the new Fixed Income group will be Kreg Jones, Senior Vice President, Managing Director of Fixed Income Capital Markets for D.A. Davidson & Co., and Sam Doyle, who currently serves as Executive Vice President, Fixed Income Capital Markets/Public Finance for Kirkpatrick Pettis. Doyle also will join the D.A. Davidson & Co. Board of Directors and the firm's management group, and other key executives of Kirkpatrick Pettis will be added to the management team as well.

"We very much believe this is the right move because it will enhance our public finance and trading platforms, create new efficiencies and provide clients with the level of expertise they've come to expect from both of our firms," Jones said.

About D.A. Davidson & Co.

D.A. Davidson & Co. is an independently owned, full-service investment firm with offices across the Northwest and Rocky Mountain regions. Founded in 1935, D.A. Davidson & Co. provides brokerage, investment banking, research, asset management, and trust and insurance services to individual, institutional and corporate clients. D.A. Davidson & Co. is owned by financial services holding company Davidson Companies. Also part of Davidson Companies are Davidson Trust Co., a wealth management and trust operation; Davidson Investment Advisors, a professional money management firm; and Davidson Travel, a full-service travel agency.

About the Kirkpatrick Pettis companies

The Kirkpatrick Pettis family of companies include Kirkpatrick, Pettis, Smith, Polian Inc.; Kirkpatrick Pettis Capital Management, Inc.; and Kirkpatrick Pettis Investment Management, Inc. Together the three firms provide a variety of products and services with a fixed income focus. These include public finance services and capital markets support for clients across the country; fixed income investment advisory services to public sector clients and non-profit institutions; and registered investment advisory services providing equity, fixed income and balanced account management for businesses and individual investors. The companies are subsidiaries of Mutual of Omaha, a Fortune 500 insurance and financial services company with over $16.4 billion in assets under management.