Boston Private Financial Holdings, a US-based wealth management firm, has agreed to sell its ownership interest in Anchor Capital Advisors to its management team.
Anchor, a Massachusetts-based value-focused asset manager and wealth adviser, managed around $9.2bn of assets at the end of September 2017, and contributed $24.7m of revenue to Boston Private’s Investment Management segment.
Upon closing of the transaction, Anchor employees will own a 70% stake in Anchor, while the remaining stake will be owned by an affiliate of Lincoln Peak Capital.
The deal consideration includes about $32m in cash at closing and future revenue share payments with a current net worth of around $15m.
The deal already secured the approval of the Boston Private board and is expected to be concluded in the first quarter of 2018, subject to Anchor raising debt financing.
Boston Private expects the sale to boost its Tier 1 common equity by nearly $30m to $35m and lead to a non-cash pre-tax charge of around $25m in the fourth quarter of 2017.
Boston Private CEO Clayton Deutsch said: “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 focussed company.
“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.”
In addition, Anchor also said that following the completion of the deal CEO and founder, Bill Rice, Sr. will become executive chairman.
The CEO role will be handed over to Bill Rice, Jr. who will also retain his existing position of CIO. At the same time, Mark Bergen will become president while retaining his existing role as COO.