SVB Financial Group to sell SVB Securities to management-led group

SVB Financial Group is set to sell its investment banking business, SVB Securities, to a management team led by CEO and founder Jeff Leerink, and backed by The Baupost, according to a definitive purchase agreement announced today.

The transaction is anticipated to close after a scheduled court approval hearing on June 29, 2023.

The sale is part of a strategic alternatives process for SVB Securities, which SVB Financial Group has been conducting in the context of its Chapter 11 proceedings.

Bill Kosturos — SVB Financial Group Chief Restructuring Officer said: “This transaction is a significant milestone in SVB Financial Group’s strategic alternatives process.

“The Restructuring Committee and its advisors conducted a disciplined and independent process intended to maximize the value of the business for SVB Financial Group stakeholders. We are confident that the transaction led by the investment bank’s current management team will preserve and enhance the value of the business.”

SVB Financial Group announces definitive agreement for sale of SVB Securities to management-led group. Photo courtesy of Minh Nguyen/Wikimedia Commons.

The transaction is comprised of 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.

SVB Financial Group’s sell-side research business, MoffettNathanson LLC, is not part of the deal and will remain within the SVB Financial Group. Post-transaction, SVB Securities will be rebranded as Leerink Partners.

The agreement was chosen as the winning bid following a competitive process approved by the U.S. Bankruptcy Court for the Southern District of New York.

Jeff Leerink said: “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.

“Our management team’s significant capital investment, coupled with key backing we’ve received from The Baupost Group, is a testament to the long-standing reputation of our firm and our employees and the value of our services to our clients and the industry.”

While subject to the final approval of the Bankruptcy Court and regulatory clearance, along with other standard closing conditions, SVB Financial Group maintains an ongoing evaluation of strategic options for SVB Capital and the company’s other assets and investments.