Ladenburg Thalmann Financial Services Inc. (NYSE: LTS) has acquired Highland Capital Brokerage Inc., an insurance company, for $42 million.

Highland provides life insurance, annuities and long-term care services.

The purchase price works out to $12.7 million for Highland's stock, plus $22.3 million to repay Highland's bank loan and $7 million for promissory notes that remain outstanding.

Ladenburg is a diversified financial services company led by Philip Frost as chairman. Subsidiaries include Securities America, Triad Advisors, Investacorp, Premier Trust, Ladenburg Thalmann Asset Management investment bank Ladenburg Thalmann & Co. Inc. The group has about $90 billion in assets under management.

The acquisition allows Ladenburg to enter the life insurance space.

Graubard Miller was Ladenburg's legal counsel, while Sirote & Permutt PC was Highland's legal adviser.

The insurance sector has been consolidating for several years. In another recent insurance deal, Hub International Ltd. acquired Gibson's Insurance Agency Ltd. in July.