SVB Financial Group, parent company of Silicon Valley Bank, recently announced that it has agreed to acquire health care investment bank Leerink Partners for as much as $340 million in total consideration. Leerink Partners is a Boston-based investment bank known for its focus on the life science and health care industries. This deal offers SVB Financial a significant inroad into the health care sector.
Following the merger, SVB Leerink will emerge as a wholly-owned subsidiary of SVB Financial Group. SVB Leerink will continue to focus on health care and life science investment banking services, complementing SVB Financial's existing commercial banking services. The acquisition deal includes $280 million in up-front cash as well as $60 million in a retention pool for key employees available for payout over the next five years. Both companies’ shareholders have approved the deal, laying the groundwork for a formal close in the first quarter of next year.
Leerink Partners emerged onto the scene in 1995 with a focus on working with life science and health care firms on M&A, capital markets, equity research and corporate finance requirements. The company’s namesake, founder and CEO Jeffrey Leerink, graduated from Union College with a degree in economics and is also a member of Harvard Medical School’s Board of Fellows.
Under the merger deal, Leerink Partners’ management team will continue to spearhead the new entities’ ventures. As Jeffrey Leerink noted, “This merger represents an important step forward for our firm as we continue to strive to be an indispensable company-building partner to our expanding global client base.”
The stated goal of the new SVB Leerink entity is to provide a complete range of capital markets offerings for both public and private health care and life science companies. SVB Leerink is anticipated to offer coverage for all subsectors of the health care industry, ranging from pharmaceuticals and medical devices to biotechnology and digital health. Both Leerink Partners and SVB Financial's existing management foresee this partnership allowing a broader reach for Leerink’s services and a greater diversity for SVB Financial’s revenue stream.