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Boston Private Financial Holdings to sell Anchor Capital Advisors

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Boston Private Financial Holdings has agreed to sell its entire ownership interest in Anchor Capital Advisors (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,” says 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 USD32 million of cash at closing and future revenue share payments that have a net present value of approximately USD15 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 USD25 million in the fourth quarter of 2017 and a tax expense of USD11 million to USD16 million at closing. The net financial impact will increase Tier 1 Common Equity by approximately USD30 million to USD35 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 USD9.2 billion of assets under management as of September 30, 2017 and accounted for USD24.7 million of revenue in Boston Private’s Investment Management segment, USD19.0 million of operating expense, and USD1 million of non-controlling 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.

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