Boston Private Financial Holdings, Inc. Announces Agreement to Sell Anchor Capital Advisors LLC
December 20 2017 - 4:15PM
Business Wire
Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) (the
“Company” or “Boston Private”) announced today that it has agreed
to sell its entire ownership interest in Anchor Capital Advisors
LLC (“Anchor”) in a transaction that will result in Anchor being
majority owned by members of its management team. As part of the
transaction, an affiliate of Lincoln Peak Capital Management, LLC,
a long-term equity partner for high quality asset management firms,
will acquire a minority interest in Anchor alongside
management.
“This transaction is consistent with our strategy of focusing
resources in businesses where we can be our client’s most trusted
advisor and offer holistic financial advice, along with integrated
Wealth Management, Trust, and Private Banking capabilities. This
transaction liberates capital for us to reinvest in a more focused
company,” said Clayton G. Deutsch, CEO of Boston Private. “In
addition, we believe that management ownership is the right
long-term solution for Anchor, allowing the entrepreneurial team
that has driven Anchor’s success under Boston Private’s ownership
to control the next phase of its growth and development. We thank
Bill Rice and the Anchor team for their contributions to Boston
Private over the years, and we wish them well in the future.”
Boston Private will receive approximately $32 million of cash at
closing and future revenue share payments that have a net present
value of approximately $15 million, subject to purchase price
adjustments, at closing. Boston Private currently estimates that
the financial impact of the transaction will result in a non-cash
pre-tax charge of approximately $25 million in the fourth quarter
of 2017 and a tax expense of $11 million to $16 million at closing.
The net financial impact will increase Tier 1 Common Equity by
approximately $30 million to $35 million. Closing is expected to
occur in the first quarter of 2018 with the actual tax expense and
corresponding increase in Tier 1 Common Equity to be determined by
the applicable tax laws in effect at the time of closing.
Anchor had approximately $9.2 billion of assets under management
as of September 30, 2017 and accounted for $24.7 million of revenue
in Boston Private’s Investment Management segment, $19.0 million of
operating expense, and $1 million of noncontrolling interest
expense in Boston Private's financial results during the first nine
months of 2017.
This transaction has been approved by the Company’s board of
directors and is subject to obtaining client consents, Anchor
raising debt financing, and customary closing conditions.
Broadhaven Capital Partners, LLC served as financial advisor and
Goodwin Procter LLP served as legal counsel to Boston Private in
this transaction. Wilmer Cutler Pickering Hale and Dorr LLP served
as legal counsel to Anchor, and Morgan, Lewis & Bockius LLP
served as legal counsel to Lincoln Peak Capital Management,
LLC.
About Boston Private Financial
Holdings, Inc.Boston Private Financial Holdings, Inc. is
a national financial services organization that owns Wealth
Management, Trust, and Private Banking affiliates with offices in
Boston, New York, Los Angeles, San Francisco, San Jose, Florida,
and Wisconsin. The Company has total assets of approximately $8
billion, and manages over $29 billion of client assets.
The Company's affiliates serve the high net worth marketplace
with high quality products and services of unique appeal to private
clients. The Company also provides strategic oversight and access
to resources, both financial and intellectual, to support affiliate
management, marketing, compliance and legal activities. (NASDAQ:
BPFH)
For more information about BPFH, visit the Company's website at
www.bostonprivate.com.
Forward-Looking
StatementsCertain statements in this press release that
are not historical facts may constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, and are intended to be covered by the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve risks and uncertainties. These
statements include, among others, statements regarding our
strategy, evaluations of future interest rate trends and liquidity,
prospects for growth in assets, and prospects for overall results
over the long term. You should not place undue reliance on our
forward-looking statements. You should exercise caution in
interpreting and relying on forward-looking statements because they
are subject to significant risks, uncertainties and other factors
which are, in some cases, beyond the Company's control.
Forward-looking statements are based on the current assumptions and
beliefs of management and are only expectations of future results.
The Company's actual results could differ materially from those
projected in the forward-looking statements as a result of, among
other factors, the ability to successfully close the Anchor
transaction; adverse conditions in the capital and debt markets and
the impact of such conditions on the Company's private banking,
investment management, wealth advisory, and trust activities;
changes in interest rates; competitive pressures from other
financial institutions; the effects of weakness in general economic
conditions on a national basis or in the local markets in which the
Company operates; changes in loan defaults and charge-off rates;
changes in the value of securities and other assets, adequacy of
loan loss reserves, or decreases in deposit levels necessitating
increased borrowing to fund loans and investments; operational
risks including, but not limited to, cybersecurity, fraud and
natural disasters; changes in government regulation; the risk that
goodwill and intangibles recorded in the Company's financial
statements will become impaired; the risk that the Company's
deferred tax asset may not be realized or may be reduced; risks
related to the identification and implementation of acquisitions,
dispositions and restructurings; changes in assumptions used in
making such forward-looking statements; and the other risks and
uncertainties detailed in the Company's Annual Report on Form 10-K
and updated by the Company's Quarterly Reports on Form 10-Q and
other filings submitted to the Securities and Exchange Commission.
Forward-looking statements speak only as of the date on which they
are made. The Company does not undertake any obligation to update
any forward-looking statement to reflect circumstances or events
that occur after the date the forward-looking statement is
made.
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version on businesswire.com: http://www.businesswire.com/news/home/20171220006046/en/
Boston Private Investor Contact:Adam
Bromleyabromley@bostonprivate.com(617) 912-4386orBoston Private
Media Contact:Steve Brownellsbrownell@bostonprivate.com(617)
912-4402
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