LPL Financial Services-the nation's
largest independent brokerage firm-announced plans to sell a majority
interest in the company to affiliates of two prominent private equity
Under the terms of the deal, the investment affiliates of Hellman & Friedman LLC and Texas Pacific Group would buy a controlling interest in the company, while LPL's founders and employees will retain about a 40% interest, according to a statement.
The deal, which is expected to close by the end of the year, values LPL Financial Services at $2.5 billion.
LPL has headquarters in Boston and San Diego and had revenues of $1.1 billion and more than $100 billion in assets under management in fiscal 2004. The company has more than 6,200 financial advisors, 3,000 branch offices and more than 1 million client accounts.
LPL's president and CEO, Mark Casady, will retain those roles after the deal and assume the additional role of chairman, according to LPL. Todd Robinson, the company's founder and current chairman, will become chairman emeritus, while co-founder Dave Butterfield, who is currently vice chairman, will retire, the company said. Co-founder Jim Putnam will remain as vice chairman and remain on the board of directors. Esther Stearns will remain chief operating officer.
No other management changes are planned as a result of the deal, the company said.
"This transaction provides LPL with world-class partners who are committed to growing our company under the same business model and operating team that have made LPL the independent brokerage firm of choice for over 6,200 financial advisors nationwide," Casady said. "Our partnership with Hellman & Friedman and TPG will provide a platform for us to expand upon the key elements of our success-especially the ability of our financial advisors to offer unbiased advice and services to their clients-and further strengthen our commitment to our advisors as the basis of our business."
Hellman & Friedman, based in San Francisco, has raised and managed over $8 billion of committed capital and invested in about 50 companies since it was founded in 1984.
Texas Pacific Group, founded in 1993 and headquartered in San Francisco, London and Fort Worth, Texas, manages more than $15 billion in assets.
Morgan Stanley and The Goldman Sachs Group, Inc. served as LPL's financial advisors in the transaction, and Simpson Thacher & Bartlett LLP served as legal counsel for the company.
Wachtell, Lipton, Rosen & Katz and Arnold & Porter served as legal counsel for Hellman & Friedman and TPG.