Bank holding company Boston Private Financial Holdings Inc. said it will complete the sale of its Westfield Capital Management unit by the fourth quarter of this year and will receive about $59 million in initial proceeds.
The company had previously agreed to complete the sale of the investment adviser to the management by 2014. Boston Private will retain a 12.5 percent revenue share in Westfield for eight years, the company said in a statement.
Through the agreement, the company will further strengthen its capital position, while exiting a business that has become "non-strategic," Boston Private Chief Executive Timothy Vaill said.
William Muggia will continue to serve as CEO at Westfield Capital.
Boston Private said it will record a one-time gain of about $45 million as part of the new agreement, and that the transaction will improve its tangible common equity ratio by 50 basis points to 6.7 percent.
Shares of the company closed at $6.23 on Tuesday on Nasdaq.
"The Westfield management team approached us, and following considerable discussions, we both concluded that expediting this transaction aligned the interests of both parties," said Vaill. "This transaction is a good opportunity for Boston Private to reallocate resources toward the growth of our other affiliates in New England and elsewhere across the country. We have the highest respect for Westfield and its valuable employees and wish them continued success."
"It has been a long-term goal of mine to return the firm to a 100 percent employee-owned organization. We have a group of professionals who try to make a difference for our clients every day, and I am happy that we have been able to further ensure the long-term stability in our organization," said Muggia. "I am also pleased that we will be able to continue our relationship with Tim Vaill, Walt Pressey and Boston Private. Boston Private has been a welcome partner and has allowed us to focus on adding value for our clients. Equity ownership will assist us greatly in attracting and retaining the best possible talent."
