Wintrust Acquires Chicago Deferred Exchange Company
December 14 2018 - 5:05PM
Wintrust Financial Corporation (Wintrust) (Nasdaq: WTFC) announced
today the acquisition of Elektra Holding Company, LLC (Elektra),
the parent company of Chicago Deferred Exchange Company, LLC
(CDEC). CDEC is a premier provider of Qualified
Intermediary services (as defined by U.S. Treasury regulations) for
taxpayers seeking to structure tax-deferred like-kind exchanges
under Internal Revenue Code Section 1031. Under IRC Section
1031, a taxpayer may defer the gain on the sale of certain
investment property if the taxpayer utilizes the services of a
Qualified Intermediary.
CDEC has successfully facilitated more than 8,000
like-kind exchanges in the past decade for taxpayers
nationwide. These transactions typically generate customer
deposits during the period following the sale of the property until
such proceeds are used to purchase a replacement property.
These deposit flows result in a source of low-cost deposits.
During 2018, deposits from CDEC customers averaged over $1
billion.
Edward J. Wehmer, President and CEO of Wintrust,
commented on the completion of the transaction: “With the
acquisition of CDEC, we establish ourselves as a major player in
the Qualified Intermediary market for tax-deferred exchanges under
IRC Section 1031. CDEC’s services will augment the comprehensive
range of services that Wintrust provides to our customers in the
commercial real estate market. This transaction also provides
Wintrust with a new fee-generating business and a significant new
potential source of low-cost deposits. Together, we are
well-positioned to employ our expanded resources and scale to
further enhance CDEC’s growth, strategies and client service.”
Tom Zidar, Chairman of the Wintrust Wealth
Management companies, added: “We are excited to join forces with
CDEC. Their leadership team has an outstanding reputation and
track record of providing exceptional customer service. We
are thrilled to bring their expertise and capabilities to Wintrust
and look forward to supporting the further growth of their
business.”
Bryan Daniels, Founding Partner of Prairie
Capital, majority owner of Elektra, who served as a Board member of
Elektra, noted: “We believe CDEC’s expertise, combined with
Wintrust’s reputation and capabilities, will provide a powerful
platform that will benefit both clients and employees.”
Mary Cunningham, who will continue to serve as
CEO of CDEC, shared her perspective: “This merger brings together
two firms that share many common values and operate distinct but
complementary lines of business. We look forward to joining
the Wintrust family.”
Terms of the TransactionThe
aggregate purchase price was paid in cash and totaled approximately
$51.9 million. The transaction is expected to be slightly
accretive to Wintrust’s 2018 earnings per share.
AdvisorsKirkland & Ellis
LLP acted as Elektra’s transaction counsel, and Schiff Hardin LLP
served as transaction counsel to Wintrust. Colonnade
Securities LLC acted as a financial advisor to Elektra.
About WintrustWintrust is a
financial holding company with assets of approximately $30 billion
whose common stock is traded on the NASDAQ Global Select Market.
Built on the "HAVE IT ALL" model, Wintrust offers sophisticated
technology and resources of a large bank while focusing on
providing service-based community banking to each and every
customer. Wintrust operates fifteen community bank subsidiaries
with over 160 banking locations located in the greater Chicago and
southern Wisconsin market areas. Additionally, the Company operates
various non-bank business units, including one of the largest
commercial insurance premium finance companies operating in the
United States and Canada, a company providing short-term accounts
receivable financing and value-added out-sourced administrative
services to the temporary staffing services industry, a business
unit engaging primarily in the origination and purchase of
residential mortgages for sale into the secondary market throughout
the United States, and companies providing wealth management
services with more than $26 billion in assets under management or
administration.
Forward-Looking Information
This press release contains forward-looking
statements within the meaning of the federal securities laws
relating to the acquisition of Elektra Holding Company, LLC, the
combination of their businesses and projected revenue, as well as
profitability and earnings outlook. Investors are cautioned
that such statements are predictions and actual events or results
may differ materially. Wintrust's expected financial results or
other plans are subject to a number of risks and uncertainties. For
a discussion of such risks and uncertainties, which could cause
actual results to differ from those contained in the
forward-looking statements, see "Risk Factors" and the
forward-looking statement disclosures contained in Wintrust's
Annual Report on Form 10-K for the most recently ended fiscal year
and any subsequent Quarterly Report on Form 10-Q.
Forward-looking statements speak only as of the date made and
Wintrust undertakes no duty to update the information.
FOR MORE INFORMATION CONTACT:
Edward J. Wehmer, President/CEO – Wintrust Financial Corporation, (847) 939-9000
David A. Dykstra, COO – Wintrust Financial Corporation, (847) 939-9000
Thomas P. Zidar, Chairman and CEO – Wintrust Wealth Management, (847) 939-9000
Wintrust Website address: www.wintrust.com
Wintrust Financial (NASDAQ:WTFC)
Historical Stock Chart
From Jun 2024 to Jul 2024
Wintrust Financial (NASDAQ:WTFC)
Historical Stock Chart
From Jul 2023 to Jul 2024