HOUSTON, April 16, 2012 /PRNewswire/ -- The Edelman
Financial Group Inc. ("TEFG" or the "Company") (NASDAQ: EF),
a nationwide wealth management firm, today announced that it
has entered into a definitive merger agreement with affiliates of
Lee Equity Partners, LLC, a private equity firm, to be acquired for
$8.85 per share in cash. This
represents a premium of 43% over TEFG's closing price Friday of
$6.18, and a premium of 33% over
TEFG's volume-weighted average closing price over the last 20
trading days.
The Edelman Financial Group Co-Chief Executive Officers
Ric Edelman and George Ball, and other members of TEFG's senior
management team, will continue in their roles with the Company
after completion of the transaction and, pursuant to the terms of
the transaction, maintain a significant equity investment in TEFG.
Simultaneously with the closing of the transaction, Mr. Edelman
will also be selling his 24% direct interest in The Edelman
Financial Center, LLC ("EFC"), a 76%-owned subsidiary of TEFG, to
an affiliate of Lee Equity Partners on substantially the same terms
provided by the existing Limited Liability Company Agreement of
EFC.
The merger agreement was negotiated on behalf of TEFG by a
Special Committee of its Board of Directors composed entirely of
independent directors with the assistance of independent financial
and legal advisors. Following the Special Committee's unanimous
recommendation, TEFG's Board of Directors unanimously approved the
merger agreement and has recommended that TEFG's shareholders adopt
and approve the merger.
Thomas H. Lee, President of Lee
Equity Partners, said, "The Edelman Financial Group has achieved a
strong track record and is a clear leader in the independent
financial advisor field. We are excited to partner with Edelman
Financial's management team, and we look forward to supporting the
company's continued expansion."
Under terms of the merger agreement, each issued and outstanding
share of TEFG's common stock will be cancelled in exchange for the
right to receive $8.85 in cash,
except for certain shares beneficially owned by management and TEFG
employees that will be rolled over and contributed to the new
holding company, and shares held by shareholders who properly
exercise and perfect appraisal rights.
The merger agreement must be approved by a two-thirds majority
of the outstanding shares of TEFG's common stock and by a majority
of the outstanding shares of TEFG's common stock held by
unaffiliated shareholders. Members of the Company's senior
management, who currently own approximately 26% of TEFG's
outstanding shares, have agreed to vote their shares in favor of
the merger. This voting obligation will terminate if the merger
agreement terminates.
The Special Committee will solicit alternative transaction
proposals from third parties for a period of 40 days after today
subject to extension for an additional 20 days for parties meeting
certain additional requirements specified in the merger agreement
(a "Go-Shop Party"). To the extent the Special Committee determines
that an alternative transaction proposal is superior to the merger
with Lee Equity Partners, TEFG may terminate the merger agreement
and accept the superior proposal. In such an event, TEFG must
pay Lee Equity Partners a customary termination fee that varies in
amount depending on whether or not the superior proposal is with a
Go-Shop Party. In addition, the merger agreement provides Lee
Equity Partners a customary right to match a superior proposal.
The proposed transaction is expected to close in the third
quarter of 2012.The merger agreement is subject to certain closing
conditions, including the absence of a material adverse effect on
TEFG's business or results of operations and the receipt of
applicable regulatory approvals. Lee Equity Partners has obtained
financing commitments for equity and debt financing in an aggregate
amount sufficient to complete the merger.
Following completion of the transaction, TEFG will become a
privately held company and its stock will no longer trade on the
Nasdaq Stock Market.
Stephens Inc. is acting as financial advisor to the Special
Committee, including with respect to the "go shop" process
described above, and has delivered a fairness opinion to the
Special Committee in connection with the transaction. Vinson &
Elkins LLP is acting as legal advisor to the Special Committee.
Thompson & Knight LLP is acting as legal advisor to The Edelman
Financial Group. Fried, Frank, Harris, Shriver & Jacobson LLP
is acting as legal advisor to Lee Equity Partners. Ric Edelman is represented in the transaction by
Paul, Weiss, Rifkind, Wharton & Garrison LLP.
About The Edelman Financial Group
The Edelman Financial Group is a wealth management company with
approximately 500 employees in 43 offices throughout the United States, and has approximately
$17 billion in client assets. Client
assets include the gross value of assets under management directly
or via outside managers and assets held in brokerage accounts for
clients by outside clearing firms. Additional information is
available at www.edelmanfinancial.com.
About Lee Equity Partners
Lee Equity Partners is a middle-market private equity investment
firm managing more than $1 billion of
capital. Lee Equity was founded by Thomas
H. Lee and focuses on control buyouts and growth capital
financings, typically investing $30 million
to $150 million per transaction in companies with enterprise
values of $100 million to $500
million. The firm seeks to partner with top-tier management
teams to build companies with differentiated market position and
high growth potential. Target sectors include business services,
consumer/retail, distribution/logistics, financial services,
healthcare services, and media.
Cautionary Statement Regarding Forward Looking
Information
This press release contains forward-looking statements relating
to the potential acquisition of TEFG by an affiliate of funds
managed by Lee Equity Partners, LLC, including, without limitation,
statements relating to the benefits of the proposed transaction,
statements relating to future performance of TEFG, statements
relating to the completion of the proposed transaction the expected
date of closing of the transaction and other statements containing
words such as "may," "could," "should," "would," "estimate,"
"expect," and similar expressions or statements of current
expectation, assumption or opinion. These are "forward-looking"
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. There are a number of risks and
uncertainties that could cause actual results to differ materially
from these forward-looking statements, including the following: (1)
TEFG may be unable to obtain the shareholder approval required for
the transaction; (2) conditions to the closing of the transaction
may not be satisfied or waived; (3) the transaction may involve
unexpected costs, liabilities or delays; (4) the business of TEFG
may suffer as a result of uncertainty surrounding the transaction;
(5) TEFG may be adversely affected by other economic, business,
and/or competitive factors; (6) legislative developments; (7)
changes in tax and other laws; (8) the occurrence of any event,
change or other circumstances that could give rise to the
termination of the merger agreement, (9) the failure to receive the
necessary debt financing set forth in the commitment letters
received in connection with the transaction, and (10) other risks
to consummation of the transaction, including the risk that the
transaction will not be consummated within the expected time period
or at all. Additional factors that may affect the future results of
TEFG are set forth in its filings with the Securities and Exchange
Commission, including its recent filings on Forms 10-K, 10-Q and
8-K, including, but not limited to, those described in TEFG's Form
10-K for the fiscal year ended December 31,
2011. These forward-looking statements reflect TEFG's
expectations as of the date of this press release. TEFG does not
undertake any obligation to update any forward-looking statement,
except as required under applicable law.
Additional Information and Where to Find It
In connection with the proposed transaction, TEFG will file a
proxy statement and other materials with the Securities and
Exchange Commission. TEFG and its directors, executive officers and
certain other members of its management and employees may be deemed
to be "participants" in the solicitation of proxies from its
shareholders in connection with the proposed transaction.
Information regarding the interests of such directors and executive
officers is included in TEFG's Definitive Proxy Statement on
Schedule 14A filed with the SEC on April 16,
2011 with respect to the 2011 Annual Meeting of Shareholders
of TEFG as well as other proxy statements and Annual Reports on
Form 10-K, previously filed with the Securities and Exchange
Commission, and information concerning all of the TEFG participants
in the solicitation will be included in the proxy statement and
other materials to be filed with the SEC in connection with to the
proposed merger when it becomes available. INVESTORS AND SECURITY
HOLDERS ARE URGED TO READ THE PROXY STATEMENT CAREFULLY AND IN ITS
ENTIRETY WHEN IT BECOMES AVAILABLE BECAUSE IT WILL CONTAIN
IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and
security holders may obtain a free copy of the proxy statement
(when available) and other documents filed by TEFG at TEFG's
website, www.edelmanfinancial.com, or at the Securities and
Exchange Commission's website, www.sec.gov. The proxy statement and
other relevant documents may also be obtained for free from TEFG by
directing such request to Susan
Bailey, Corporate Secretary, at (713) 220-5115.
SOURCE The Edelman Financial Group Inc.