SVB Financial Group agrees sale of its investment banking business, SVB Securities
SVB Financial Group, the former parent company of Silicon Valley Bank, has entered into an agreement to sell its investment banking business, SVB Securities, to a group led by Jeff Leerink, SVB Securities’ CEO and founder, and backed by funds managed by hedge fund firm The Baupost Group.
SVB Financial Group to sell its investment banking business
The transaction is expected to close following a court approval hearing scheduled for 29 June.
SVB Financial Group filed for Chapter 11 bankruptcy proceedings in the US back in March following the collapse of Silicon Valley Bank.
As per the agreement, the bidding group will acquire SVB Financial Group’s investment banking business for a combination of cash, repayment of an intercompany note, the assumption of certain liabilities (including significant deferred compensation obligations), and a 5% equity instrument in the buyer entity.
Bill Kosturos, SVB Financial Group’s chief restructuring officer, says the company is “confident that the transaction led by the investment bank’s current management team will preserve and enhance the value of the business”.
“Our firm plays a critical role in the healthcare ecosystem, and this transaction will allow us to continue serving our clients across all corners of the healthcare industry,” says Jeff Leerink.
Post the management buyout, SVB Securities will be rebranded to Leerink Partners.
SVB Financial Group says that MoffettNathanson LLC, a sell-side research business owned by the company, “is not included in the transaction and will remain part of SVB Financial Group”.
The group adds it is still evaluating strategic alternatives for SVB Capital as well as other assets and investments.
