Industries Banking/Finance

Fairfax County-based wealth management firm going private

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The Edelman Financial Group Inc., a Fairfax-based, publicly traded wealth management firm is being taken private by Lee Equity Partners LLC, a New York-based private equity firm.

Edelman Financial has agreed to be acquired for $8.85 per share in cash in a deal worth $257 million, according to Bloomberg Businessweek.

Company officials say the offer represents a premium of 43 percent over its closing price Friday of $6.18 on Nasdaq and a premium of 33 percent over its volume-weighted average closing price over the last 20 trading days.

Edelman Financial has approximately 500 employees in 43 U.S. offices and has approximately $17 billion in client assets.

Edelman Financial Co-Chief Executive Officers Ric Edelman and George Ball, and other members of its senior management team, will continue in their roles with the company and maintain a significant equity investment in the firm, the company said.

Edelman will also sell his 24 percent direct interest in The Edelman Financial Center,  a 76 percent-owned subsidiary of the firm to a Lee Equity affiliate.

Ric Edelman has been providing financial advice to consumers for 25 years. His television series, “The Truth About Money with Ric Edelman”  airs on public television stations across the country, and his syndicated radio program is heard in 54 markets.

The merger agreement must be approved by a two-thirds majority of the outstanding shares of Edelman Financial common stock and by a majority of the outstanding shares of its common stock held by unaffiliated shareholders. Members of the company’s senior management, who currently own approximately 26 percent of the firm’s outstanding shares, have agreed to vote their shares in favor of the merger.

The transaction is expected to close in the third quarter of 2012. Lee Equity Partners said it has obtained financing commitments for equity and debt financing sufficient to complete the merger.
After completion of the deal, Edelman Financial will become a privately held company.

Lee Equity Partners is a middle-market private equity investment firm managing more than $1 billion of capital.


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