The former parent company of Silicon Valley Bank, SVB Financial Group, has entered into an agreement to transfer its investment banking business, SVB Securities, to a group led by SVB Securities’ CEO and founder, Jeff Leerink, and backed by funds managed by hedge fund firm The Baupost Group.
In March, SVB Financial Group filed for Chapter 11 bankruptcy in the United States, following the failure of Silicon Valley Bank.
According to the terms of the agreement, the bidding group will acquire the investment banking business of SVB Financial Group for a combination of cash, repayment of an intercompany note, assumption of certain liabilities (including substantial deferred compensation obligations), and a 5% equity instrument in the buyer entity.
The transaction is anticipated to conclude on June 29 after a court approval hearing.
Bill Kosturos, chief restructuring officer of SVB Financial Group, states that the company is “confident that the transaction led by the investment bank’s current management team will preserve and increase the value of the business.”
Jeff Leerink explains, “Our firm plays a crucial role in the healthcare ecosystem, and this transaction will allow us to continue serving clients in all sectors of the healthcare industry.”
Following the management acquisition, the name of SVB Securities will be changed to Leerink Partners.
MoffettNathanson LLC, a sell-side research firm owned by SVB Financial Group, “is not included in the transaction and will remain part of SVB Financial Group,” according to the company.
The group continues to assess strategic alternatives for SVB Capital and other assets and investments.
