Chicago private equity firm Madison Dearborn LLC is buying National Financial Partners Corp. (NYSE: NFP) for $1.3 billion.
The purchase price works out to $25.35 per share in cash. The company’s shares closed at $20.05 on March 12, the last day of trading before press reports indicated NFP was considering a sale. Shares on April 15 opened at $25.05.
The target said on March 13 it was considering a sale after it received multiple proposals.
New York-based NFP provides benefits, insurance and wealth management services to companies and high net worth individuals. The company is led by Jessica Bibliowicz, daughter of former Citigroup chief executive Sandy Weill. Bibliowicz announced in April 2012 that she would step down from her role as president of the company, but stay on as chief exectutive and chairman during a transition period. The company's chief operating officer, Douglas Hammond, should be taking over as chief executive.
After receiving interest from private equity firms, NFP’s board of directors formed a special committee to consider a sale, and unanimously approved Madison Dearborn’s offer.
Privat equity firm TPG Capital also bid for NFP, according to reports.
Madison Dearborn has debt financing commitments from Deutsche Bank Securities Inc., Morgan Stanley Senior Funding Inc. and UBS Securities LLC. Madison Dearborn has also committed to providing a cash investment.
The deal is expected to close in the third quarter.
Madison Dearborn has raised six funds since its founding in 1992, and has invested in about 125 companies. The firm’s portfolio companies include Aderant Holdings Inc. Evo Payments International and Topps Co. Inc. Madison invested in business software company Aderant in November. The company also bought Things Remembered Inc. for $295 million in May.
Bank of American Merrill Lynch was NFP’s board’s financial adviser, while Cleary Gottlieb Steen & Hamilton LLP acted as its legal counsel. Skadden Arps Slate Meagher & Flom LLP was NFP’s counsel on the deal. UBS Securities LLC was Madison Dearborn’s financial adviser, while Ropes & Gray LLP provided legal advice.
The deal follows several in the wealth management sector. In April, Cetera Financial Group's announced it would buy two broker dealers with a combined $25 billion in assets from MetLife Inc. In February, Crestview Partners said it would purchase an investment advisory firm from KeyCorp. The deals are spurred by customer demands for more information because of increased regulatory conditions.