Raymond James Financial, Inc. announced that it has entered into a definitive agreement to acquire Pittsburgh-based TriState Capital Holdings in a cash and stock transaction, worth about $1.1 billion, according to a news release.
“TriState Capital has a terrific, client-centric franchise focused on serving clients with premier private banking, commercial banking and niche investment management products and services,” Paul Reilly, chairman and CEO of Raymond James, said in a statement. “As we have followed the firm and management team over the past several years, including as its largest deposit client, we’ve admired its leadership position in offering securities-based lending through a scalable and robust technology platform.”
Reilly added that the acquisition, which is expected to close next year, subject to customary closing conditions, including regulatory approvals and approval by TriState Capital shareholders, further illustrates Raymond James’ “commitment to utilize excess capital through organic and inorganic growth that we expect to drive strong returns for shareholders over the long term.”
Jim Getz, chairman and CEO of TriState Capital, said the firm was founded 14 years ago “because we saw an incredible opportunity to build a successful company built on a commitment to independence, a long-term perspective, integrity, and putting clients squarely at the center of everything we do and every decision we make.” He said Raymond James shares those values.
“Our clients will continue to benefit from working with the same talented teams and the TriState Capital and Chartwell brands they already know so well, along with the technology we’ve invested in to provide an exceptional and responsive client experience. Raymond James’ strong balance sheet will provide supplemental capital and liquidity to continue enabling our fast-growing and highly scalable business model to meet clients’ commercial and securities-based lending and asset management needs,” he said.
Upon closing, TriState Capital will continue to operate as a separate branded firm and as a stand-alone division and independently chartered bank subsidiary of Raymond James. Its top management team will continue in place, with Getz as chairman and CEO, Brian Fetterolf as TriState Capital Bank’s CEO and Tim Riddle as Chartwell’s CEO. Also, management and about 350 associates are expected to stay with the firm in its existing office locations to support TriState Capital’s continued growth and high service levels, the release said.
The deal calls for Raymond James to pay TriState common shareholders $6 in cash and 0.25 shares for each share of TriState Capital common stock, which represents the equivalent of $31.09 per share in cash and Raymond James closing price on October 19. The agreement was announced on October 20.
According to the release, the sole holder of the TriState Capital Series C preferred stock has agreed to convert to common shares at the prescribed exchange ratio and cashed out at $30 per share. The TriState Series A and Series B shares will remain outstanding and be converted into equivalent Raymond James preferred stock.