The Edelman Financial Group (TEFG) is entering a transaction with Lee Equity Partners to go private in a transaction valued at about $260 million, or $8.85 a share. Lee Equity, headed by longtime leveraged buyout tycoon Thomas H. Lee, is paying a 43% premium over Friday's closing price for the wealth management company.

The Edelman Financial Group's co-CEOs Ric Edelman and George Ball plan to retain both their roles with the company and a major part of their equity investments.

In a press release, the company said a special committee of its board of directors will solicit alternative transactions for the next 40 days to determine if they can obtain a better offer. Management of TEFG, who reportedly own 26% of the shares outstanding, have agreed to vote for the merger. Edelman's own wealth management firm, Edelman Financial Services, generates about 50% of the revenues and profits for its parent, TEFG. In an interview last month, Edelman said TEFG was in the midst of negotiating the acquisition of another wealth management concern.

As a thinly traded microcap stock, TEFG directors may have concluded the benefits of being a public company were outweighed by the costs. The transaction will also give advisors in some of the firms acquired by TEFG a chance to reduce their positions in the company at an attractive price.

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