SVB Financial Group entered into a definitive purchase agreement with the management team bidder group led by Jeff Leerink, SVB Securities' Chief Executive Officer and Founder, and backed by funds managed by The Baupost Group L.L.C., for the sale of its investment banking business, SVB Securities. A hearing to seek required court approval is scheduled for June 29, 2023, and the transaction is expected to close shortly thereafter.

As previously announced as part of its Chapter 11 proceeding, SVB Financial Group has been conducting a strategic alternatives process for SVB Securities, led by the Board's Restructuring Committee and supported by its independent financial advisors. Under the terms of the purchase agreement, the bidder group will acquire the investment banking business for a combination of cash, repayment of an intercompany note, the assumption of certain liabilities (including significant deferred compensation obligations), and a 5% equity instrument in the buyer entity. MoffettNathanson LLC, a sell-side research business owned by SVB Financial Group, is not included in the transaction and will remain part of SVB Financial Group.

"This transaction is a significant milestone in SVB Financial Group's strategic alternatives process," said Bill Kosturos, SVB Financial Group's Chief Restructuring Officer. "The Restructuring Committee and its advisors conducted a disciplined and independent process intended to maximize the value of the business for SVB Financial Group stakeholders. We are confident that the transaction led by the investment bank's current management team will preserve and enhance the value of the business."

"Our firm plays a critical role in the healthcare ecosystem, and this transaction will allow us to continue serving our clients across all corners of the healthcare industry," Jeff Leerink said. "Our management team's significant capital investment, coupled with key backing we've received from The Baupost Group, is a testament to the long-standing reputation of our firm and our employees and the value of our services to our clients and the industry. I am excited to once again have the privilege to lead this exceptionally talented, dedicated, and passionate team of professionals."

In connection with the management buyout, SVB Securities will be rebranded Leerink Partners.

Transaction Details

The agreement for the management-led buyout was selected as the successful bid for SVB Securities following a competitive bidding process conducted under procedures approved by the U.S. Bankruptcy Court for the Southern District of New York. The agreement is subject to final approval of the Bankruptcy Court and regulatory approval, as well as other customary closing conditions. SVB Financial Group is continuing to evaluate strategic alternatives for SVB Capital and the Company's other assets and investments.

Advisors

Centerview Partners LLC is serving as financial advisor, Sullivan & Cromwell LLP is serving as legal counsel and Alvarez & Marsal is serving as the restructuring advisor to SVB Financial Group as debtor-in-possession. Rothschild & Co. US Inc. is serving as financial advisor to the Leerink Management Team and to The Baupost Group funds. Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal counsel to the Management Team and The Baupost Group funds are represented by Willkie Farr & Gallagher LLP.