U.S. wealth management firm Edelman Financial Group Inc. agreed to a buyout offer from private-equity firm Lee Equity Partners that values the company at roughly $263 million.
Under the agreement, Lee Equity Partners is offering Edelman shareholders $8.85 a share in cash, a 43% premium to its Friday closing price. Shares, which haven’t traded at that level in roughly a year, jumped 41% to $8.70 in early trading.
Edelman co-CEOs Ric Edelman and George Ball and other senior managers are expected to continue in their positions following the closing of the deal.
Members of the group, who together own roughly 26% of the firm’s outstanding shares, have also agreed to vote in favor of the transaction.
The agreement, which still must be approved by a two-thirds majority of the firm’s shareholders, also includes a so-called “go-shop” provision that allows Edelman to seek alternative offers for a period of up to 60 days.
Edelman, which manages roughly $16.3 billion in client assets, has seen stronger markets boost its fee-based revenues. The firm last month reported a higher core profit for the fourth quarter as revenue jumped 21%.
Until March last year, Edelman was known as Sander Morris Harris Group. At the time of the name change, the founder Ric Edelmam was named co-CEO alongside Ball. Ball will step aside as CEO after the Lee transaction is completed.
The deal is the latest in a series of takeovers by private equity firms in the investment business. Warburg Pincus agreed to acquire Mutual Fund Store last August and Carlyle Group acquired Avalon Advisors.