- SVB Financial Group, the parent company of Silicon Valley Bank, agreed to buy Boston Private Financial Holdings for approximately $900 million in cash and stock, the companies announced in a press release Monday.
- The move cements a push into wealth management by Silicon Valley Bank, best known for financing startups and venture capital firms.
- The deal, which is expected to close in mid-2021, would vault SVB's assets under management to $17.7 billion, from $1.4 billion, according to TechCrunch. The combined company will have $11.6 billion in private banking loans — more than half coming from Boston Private, The Boston Globe reported.
The Silicon Valley-Boston Private tie-up marks the opening salvo in 2021 mergers and acquisitions.
In a conference call with analysts, Silicon Valley Bank CEO Greg Becker said he was drawn to Boston Private for its reputation, technology and team.
SVB touted Boston Private's recently redesigned technology platform as a net gain in the deal, and plans to adopt Boston Private's digital platforms, American Banker reported. Additionally, Boston Private's product suite allows SVB to expand its wealth management options to include tax planning, trust services, philanthropy and estate planning, according to the press release.
SVB said it planned $200 million in restructuring charges tied to the deal. That includes employee retention and real estate integration and $65 million to integrate the two companies' technology systems. The bank said it plans to cut about 20% of Boston Private's noninterest expenses, according to American Banker.
SVB formed its wealth advisory business in 2011, according to TechCrunch. But this push a decade later could be seen as further support for entrepreneurial customers as their finances evolve past lean startup years.
"Our clients rely on us to help increase the probability of their success — both in their business and personal lives," Becker said in the release. "Boston Private's experienced and well-regarded team, robust service offering and advanced technology platform will significantly bolster our private bank and wealth management capabilities and enhance our ability to offer products and services tailored to the needs of founders, executives and investors."
Boston Private borrowers, meanwhile, could benefit from SVB's wider footprint and more robust balance sheet.
"Together, SVB and Boston Private will be well-positioned to grow and scale our business, leveraging SVB's deep client relationships and broad reach across the innovation economy to capture a greater share of the wealth management market," Anthony DeChellis, Boston Private's CEO, said in the release.
DeChellis, who served as CEO of private banking in the Americas at Credit Suisse from 2006 to 2013, will co-lead the combined private banking and wealth management business with Yvette Butler, SVB's head of private bank, wealth advisory and wine. Butler joined SVB in 2018 after stints at Capital One, Wells Fargo and E*Trade.
Butler told Business Insider last year she sees her job primarily as a retention strategy. "Clients are already here," she said. "We've helped them grow their fund or business — and I see our role as private bank and wealth advisory as retaining."
Silicon Valley Bank will pay $10.94 a share for the acquisition, a premium of more than 29% over its Dec. 31 closing stock price. SVB's stock has soared 60% over the past three years, while Boston Private's has sagged 45%, The Boston Globe reported.