BPFH & Westfield Capital Agree to Accelerate Purchase Option
Tuesday , October 06, 2009 16:35ET
BOSTON, Oct 06, 2009 (BUSINESS WIRE) -- Boston Private Financial Holdings, Inc. (NASDAQ: BPFH) today announced an agreement whereby the management team of Westfield Capital Management will complete the purchase of that firm now, instead of in 2014 as contemplated in a previously-announced agreement. In exchange, BPFH will receive approximately $59 million in initial proceeds and retain a 12.5 percent revenue share in Westfield for eight years.
The key elements of this transaction, subject to the provisions of the agreement, include:
-- $54 million in cash at closing plus a $5 million note due in one year.
-- Retention of a 12.5 percent interest in Westfield revenues for eight years.
-- One-time pre-tax book gain of approximately $45 million.
-- Improvement in BPFH's TCE/TA ratio by 50 basis points to 6.7%.
"Through this agreement we are able to further strengthen our capital position and yet maintain a significant earnings stream from Westfield while exiting a business that has become non-strategic," said Timothy L. Vaill, Chairman and CEO, BPFH. "By any measure, the Westfield investment has been a success for BPFH shareholders, delivering strong growth and many times over what we paid in terms of earnings. However, Westfield's expansion of its institutional money management business diverges from BPFH's core strategy of providing wealth management services to high-net-worth individuals, their families and their businesses."
William Muggia will continue to serve as President, CEO and CIO of Westfield Capital Management following the close of the transaction. The firm's management and personnel will not change and the company will remain headquartered in Boston. Mr. Muggia said, "We have enjoyed our long and fruitful history with Boston Private. This purchase is consistent with our previously stated goal of becoming an employee owned firm. It is important to note that current Westfield Partners are funding a significant portion of this transaction. We look forward to continuing our relationship with Boston Private on this new basis."
Concluded Vaill, "We are very proud of the success of our partnership with Westfield over the years. Under Will's leadership--and before him Arthur Bauernfeind and Mike Hazard, the founder of the firm, Westfield grew by more than 700% in assets under management and established a world-wide client base. Under this new agreement, we look forward to participating in Westfield's next round of growth and wish the very best to Will and his entire team."
The transaction is expected to close in the fourth quarter upon completion of financing and other closing conditions.
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