Boston Private Financial has agreed to sell its entire ownership interest in Anchor Capital Advisors in a transaction that will result in Anchor being majority owned by members of its management team. As part of the transaction, an affiliate of Lincoln Peak Capital Management, a long-term equity partner for high quality asset management firms, will acquire a minority interest in Anchor alongside management. Boston Private will receive approximately $32M of cash at closing and future revenue share payments that have a net present value of approximately $15M, subject to purchase price adjustments, at closing. Boston Private currently estimates that the financial impact of the transaction will result in a non-cash pre-tax charge of approximately $25M in Q4 and a tax expense of $11M-$16M at closing. The net financial impact will increase Tier 1 Common Equity by approximately $30M-$35M. Closing is expected to occur in 1Q18 with the actual tax expense and corresponding increase in Tier 1 Common Equity to be determined by the applicable tax laws in effect at the time of closing. Anchor had approximately $9.2B of AUM as of September 30, and accounted for $24.7M of revenue in Boston Private's Investment Management segment, $19.0M of operating expense, and $1M of noncontrolling interest expense in Boston Private's financial results during the first nine months of 2017. The transaction is subject to obtaining client consents, Anchor raising debt financing, and customary closing conditions.
