Gilman shareholders will receive up to 24 million shares in National Holdings common stock, which will assume up to $5.4 million in Gilman debt, which it said would be repaid about the time of the closing. The deal is being accounted for as a merger.

National's CEO Mark Klein said in a conference call that one benefit National gets is Gilman’s tax preparation business, which is in line with his company’s desire to diversify and expand revenue. Klein said the deal makes National a one-stop provider of brokerage, financial planning tax preparation, as well as investment banking corporate finance support to small and mid-cap clients National intends to continue expansion of its offerings.

National itself recapitalized via an $8.8 million private sale of common stock in January with about $2.8 million used to pay debt. Klein was selected as CEO at the same time.

National’s revenue for the 12 months trailing March 31 was $157 million, a 30-percent increase from $119 million a year earlier. RIA Assets also increase about 32 percent to $1.3 billion.  The acquisition of Gilman will enable National Holdings to increase its rep count to over 825 advisers, up from 680.

GilmanCiocia was exclusively a financial services company until it acquired tax preparation operations a few years ago to diversify its operations. For the third quarter ended March 31, Gilman had net income of $1.24 million, up from $287,000. Revenue dropped to $11 million from $12.3 million the prior year and both financial planning and tax preparation revenue were down.

National’s revenue for the half ended March 31 was $32.9 million, a 2.3-percent increase from $33.2 million a year earlier.  The company’s net income for the most recently ended half was $669,000, a wide swing from a loss of $1.7 million in last year’s corresponding period.

A portion of the savings came in a reduction in interest expense, which fell to $66,000, down from $276,000. The company also reduced occupancy, equipment and other administrative costs to $981,000 from $1.3 million. National attributed that to a reduction in the amounts paid for customer settlements and office rent.