Acquisition

TriState Capital to acquire Chartwell Investment Partners

TriState Capital Holdings is to acquire Chartwell Investment Partners, an investment management firm with over 150 institutional clients and approximately USD7.5bn in assets under management.

The holding company for TriState Capital Bank has been actively evaluating investment management firms as part of its longstanding strategy to potentially acquire a firm in order to profitably accelerate recurring fee-income growth, while complementing the products and services the Pittsburgh-based bank already offers to financial intermediaries and high-net-worth clients nationwide.
 
The purchase will include substantially all of the assets of Chartwell, and TriState Capital believes the acquisition will be approximately 25 per cent accretive to its earnings per share in the first 12 months following completion of the transaction.
 
“Chartwell’s partners and employees have built a world-class investment management firm, and we look forward to supporting their continued growth and success in serving their exceptional institutional clients,” says TriState Capital chief executive officer James F Getz. “The acquisition of Chartwell will enhance TriState Capital’s recurring fee income, provide new product offerings for our national network of financial intermediaries and leverage our financial services distribution capabilities. We are excited that Chartwell has the talent and infrastructure already in place to accommodate significant growth in client accounts and assets for years to come.”
 
TriState Capital has estimated the transaction value to be approximately USD60m, comprised of a purchase price of approximately USD45m, payable in cash, and estimated earn-out consideration of approximately USD15m to be finally determined based on the growth in profitability of Chartwell in 2014. Up to 60 per cent of the earn-out may be paid in common stock of TriState Capital at its option. The asset purchase transaction is expected to close in the first quarter of 2014, subject to regulatory requirements, obtaining certain Chartwell-client consents and other customary closing conditions.
 
Chartwell provides advisory and sub-advisory investment management services primarily to institutional plan sponsors such as public mutual funds, corporations, Taft-Hartley funds, endowments and foundations. Its annual revenues are expected to exceed USD25m in 2013. Chartwell’s entire team of more than 40 employees will be joining TriState Capital. The investment management business will become a wholly owned subsidiary of TriState Capital Holdings and it will continue to operate from its Berwyn, Pennsylvania offices under the Chartwell brand upon completion of the transaction.
 
“We are very pleased to be joining the TriState Capital team,” says Chartwell managing partner, chief executive officer Timothy J Riddle. “Given TriState Capital’s financial strength and growth culture, its officers’ and directors’ experience in building investment management businesses, and their support for our proprietary, fundamentals-based approach to identifying quality investments, we believe this partnership will be an outstanding fit. Importantly, our clients will continue to be served by the same investment and client service professionals they’ve come to rely on for consistent results and exceptional service, and we look forward to introducing our capabilities to TriState Capital’s financial intermediaries and relationship managers.”

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