The $9.8 billion-asset Veritex
said in a press release Thursday that it will pay StoneCastle Partners $91
million in cash and stock for the business, which administers about $8 billion
of deposit for broker/dealers and clearing firms through FDIC-insured cash
sweep programs.
Veritex also plans to commence a common stock offering to raise about $150 million.
“We are excited at the opportunity to enhance our funding and liquidity
profile with a modern, branchless distribution channel that provides sticky
core deposits to fund several years of future growth,” C. Malcolm Holland, Veritex’s
chairman and CEO, said in the release.
“Meeting the needs of customers
and communities is priority number one and interLINK enables us to do that with
low-cost, flexible funding that will continue to scale with minimal overhead to
generate positive operating leverage,” Holland added. “The financial benefits
to shareholders are expected to be significant with low-risk given the
capital-light nature of the business and our significant expertise buying and
integrating businesses over that last 10 years.”
Veritex said it will be able to provide broker/dealers with other
services, including private banking and securities lending. The company said
that interLINK administers about 420,000 retail brokerage accounts.
Veritex said it expects the deal to be neutral to 2023 earnings
per share and 8% accretive the following year. It should also be accretive to
tangible book value.
The deal is expected to close in the third quarter.
Goldman Sachs and Skadden, Arps, Slate, Meagher &
Flom advised Veritex. Keefe, Bruyette & Woods and Dechert advised StoneCastle.
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