UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
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Emerging growth company
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| Item 1.01 | Entry into a Material Definitive Agreement. |
On January 4, 2021, SVB Financial Group, a Delaware corporation (“SVB”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Boston Private Financial Holdings, Inc., a Massachusetts corporation (“Boston Private”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Boston Private will merge with and into SVB (the “Merger”), with SVB continuing as the surviving entity in the Merger. Following the Merger, Boston Private’s wholly owned subsidiary, Boston Private Bank & Trust Company, will merge with and into SVB’s wholly owned subsidiary, Silicon Valley Bank (the “Bank Merger”), with Silicon Valley Bank continuing as the surviving entity in the Bank Merger. The Merger Agreement was unanimously approved by the Board of Directors of each of SVB and Boston Private.
Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, par value $1.00 per share, of Boston Private (“Boston Private Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares held by Boston Private or SVB, will be converted into the right to receive 0.0228 shares of common stock (the “Exchange Ratio”), par value $0.001 per share, of SVB (“SVB Common Stock”) and $2.10 in cash (the “Per Share Cash Consideration”). Holders of Boston Private Common Stock will receive cash in lieu of fractional shares.
At the Effective Time, each outstanding Boston Private equity award granted under Boston Private’s equity compensation plans, other than Boston Private performance-based stock options, will be converted into a corresponding award with respect to SVB Common Stock, with the number of shares underlying such award (and, in the case of stock options, the applicable exercise price) adjusted based on the sum of (1) the Exchange Ratio and (2) the quotient obtained by dividing (A) the Per Share Cash Consideration by (B) the average closing price of SVB Common Stock on the NASDAQ Stock Market for the five full trading days ending the day prior to the Effective Time. Each such converted SVB equity award will continue to be subject to the same terms and conditions as applied to the corresponding Boston Private equity award immediately prior to the Effective Time, except that in the case of Boston Private performance-based restricted stock unit awards, the number of shares underlying the converted SVB equity award will be determined based on the greater of target and actual performance for the portion of the applicable performance period through the Effective Time as reasonably determined by the Compensation Committee of the Board of Directors of Boston Private consistent with past practice, and such award will continue to vest after the Effective Time solely based on continued service. Each outstanding Boston Private performance-based stock option will, subject to obtaining the requisite consent by the holder thereof, be cancelled at the Effective Time for no consideration. No offering under the Boston Private 2001 Employee Stock Purchase Plan will occur after December 31, 2020.
The Merger Agreement contains customary representations and warranties from both SVB and Boston Private, and each party has agreed to customary covenants, including, among others, covenants relating to (1) the conduct of its business during the interim period between the execution of the Merger Agreement and the Effective Time and (2) in the case of Boston Private, its obligation to call a meeting of its shareholders to approve the Merger Agreement and the Merger, and, subject to certain exceptions, to recommend that its shareholders approve the Merger Agreement and the Merger, and its non-solicitation obligations relating to alternative acquisition proposals.
The completion of the Merger is subject to certain customary mutual conditions, including, among others, (1) the approval of the Merger by the affirmative vote of at least two-thirds of all the shares of Boston Private Common Stock entitled to vote, (2) the authorization for listing on the NASDAQ Stock Market of the shares of SVB Common Stock to be issued in the Merger, subject to official notice of issuance, (3) the effectiveness of the registration statement on Form S-4 for the SVB Common Stock to be issued in the Merger, (4) the absence of any order, injunction, decree or other legal restraint preventing the completion of the Merger or the Bank Merger or making the completion of the Merger or the Bank Merger illegal, and (5) the receipt of required regulatory approvals, including the approval of the Board of Governors of the Federal Reserve System, the California Department of Financial Protection and Innovation and the Massachusetts Commissioner of Banks. Each party’s obligation to complete the Merger is also subject to certain additional customary conditions, including (a) subject to certain exceptions, the accuracy of the representations and warranties of the other party, (b) performance in all material respects by the other party of its obligations under the Merger Agreement and (c) receipt by such party of an opinion from its counsel to the effect that the Merger will qualify as a reorganization within the meaning of Section 368(a) of the Internal Revenue Code of 1986, as amended.
The Merger Agreement provides certain termination rights for both SVB and Boston Private and further provides that a termination fee of $36 million will be payable by Boston Private to SVB upon termination of the Merger Agreement under certain circumstances.
The foregoing description of the Merger Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Merger Agreement, which is attached hereto as Exhibit 2.1 and is incorporated herein by reference. The representations, warranties and covenants of each party set forth in the Merger Agreement have been made only for the purposes of, and were and are solely for the benefit of the parties to, the Merger Agreement, may be subject to limitations agreed upon by the contracting parties, including being qualified by confidential disclosures made for the purposes of allocating contractual risk between SVB and Boston Private instead of establishing these matters as facts, and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Accordingly, the representations and warranties may not describe the actual state of affairs at the date they were made or at any other time, and investors should not rely on them as statements of fact. In addition, such representations and warranties (1) will not survive consummation of the Merger, and (2) were made only as of the date of the Merger Agreement or such other date as is specified in the Merger Agreement. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the parties’ public disclosures. Accordingly, the Merger Agreement is included with this filing only to provide investors with information regarding the terms of the Merger Agreement, and not to provide investors with any other factual information regarding SVB or Boston Private, their respective affiliates or their respective businesses. The Merger Agreement should not be read alone, but should instead be read in conjunction with the other information regarding SVB, Boston Private, their respective affiliates or their respective businesses, the Merger Agreement and the Merger that will be contained in, or incorporated by reference into, the Registration Statement on Form S-4 that will include a proxy statement of Boston Private and a prospectus of SVB, as well as in the Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and other filings that each of SVB and Boston Private make with the Securities and Exchange Commission (the “SEC”).
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits
| Exhibit Number |
||
| 2.1 | Agreement and Plan of Merger, dated as of January 4, 2021, by and between SVB Financial Group and Boston Private Financial Holdings, Inc.* | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). | |
| * | Pursuant to Item 601(b)(2) of Regulation S-K, certain schedules and similar attachments have been omitted. The registrant hereby agrees to furnish a copy of any omitted schedule or similar attachment to the SEC upon request. |
Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including but not limited to SVB’s and/or Boston Private’s expectations or predictions of future financial or business performance or conditions. Forward-looking statements are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “target,” “estimate,” “continue,” “positions,” “prospects” or “potential,” by future conditional verbs such as “will,” “would,” “should,” “could” or “may”, or by variations of such words or by similar expressions. These forward-looking statements are subject to numerous assumptions, risks and uncertainties, which change over time. Forward-looking statements speak only as of the date they are made and we assume no duty to update forward-looking statements. Actual results may differ materially from current projections.
In addition to factors previously disclosed in SVB’s and Boston Private’s reports filed with the SEC and those identified elsewhere in this document, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: ability to obtain regulatory approvals and meet other closing conditions to the merger, including approval by Boston Private’s shareholders on the expected terms and schedule; delay in closing the merger; the outcome of any legal proceedings that may be instituted against
SVB or Boston Private; the occurrence of any event, change or other circumstance that could give rise to the right of one or both parties to terminate the merger agreement providing for the merger; difficulties and delays in integrating Boston Private’s business or fully realizing cost savings and other benefits; business disruption following the merger; changes in asset quality and credit risk; the inability to sustain revenue and earnings growth; the inability to retain existing Boston Private clients; the inability to retain Boston Private employees; changes in interest rates and capital markets; inflation; customer borrowing, repayment, investment and deposit practices; customer disintermediation; the introduction, withdrawal, success and timing of business initiatives; competitive conditions; the inability to realize cost savings or revenues or to implement integration plans and other consequences associated with mergers, acquisitions and divestitures; economic conditions; the impact, extent and timing of technological changes, capital management activities, and other actions of the Federal Reserve Board and legislative and regulatory actions and reforms; and the impact of the global COVID-19 pandemic on SVB’s and/or Boston Private’s businesses, the ability to complete the proposed merger and/or any of the other foregoing risks.
Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
Important Additional Information and Where to Find It
In connection with the proposed merger, SVB will file with the SEC a Registration Statement on Form S-4 that will include a Proxy Statement of Boston Private and a Prospectus of SVB, as well as other relevant documents concerning the proposed transaction. The proposed merger involving Boston Private and SVB will be submitted to Boston Private’s shareholders for their consideration. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF BOSTON PRIVATE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING THE MERGER WHEN IT BECOMES AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION.
A free copy of the Proxy Statement/Prospectus, as well as other filings containing information about SVB and Boston Private, may be obtained at the SEC’s Internet site (http://www.sec.gov). Copies of documents filed with the SEC by SVB will be made available free of charge on SVB’s website at http://ir.svb.com or by contacting SVB’s Investor Relations department at 408.654.7400; 3005 Tasman Drive, Santa Clara, CA 95054; or ir@svb.com. Copies of documents filed with the SEC by Boston Private will be made available free of charge on Boston Private’s website at http://ir.bostonprivate.com or by contacting Boston Private’s Investor Relations department at 617.912.4386; 10 Post Office Square, Boston, MA 02109; or investor-relations@bostonprivate.com.
Participants in the Solicitation
SVB, Boston Private and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies from the shareholders of Boston Private in connection with the proposed merger. Information about the directors and executive officers of SVB is set forth in the proxy statement for SVB’s 2020 Annual Meeting of Stockholders, which was filed with the SEC on March 9, 2020, and other documents filed by SVB with the SEC. Information about the directors and executive officers of Boston Private is set forth in the proxy statement for Boston Private’s 2020 Annual Meeting of Shareholders, which was filed with the SEC on March 16, 2020, and other documents filed by Boston Private with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction may be obtained by reading the Proxy Statement/Prospectus regarding the proposed merger when it becomes available. Free copies of this document may be obtained as described in the preceding paragraph.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SVB FINANCIAL GROUP | ||
| By: | /s/ Daniel Beck | |
| Name: | Daniel Beck | |
| Title: | Chief Financial Officer | |
Date: January 8, 2021