Madison Dearborn Partners has agreed to buy National Financial Partners in a deal valued at about $1.3 billion. Terms of the deal call for NFP shareholders to receive $25.35 in cash for each share of NFP common stock they own. Deutsche Bank Securities, Morgan Stanley Senior Funding and UBS Securities are providing debt financing. NFP is a benefits, insurance and wealth management business. BofA Merrill Lynch advised NFP’s board while UBS acted as financial advisor to Madison Dearborn.
National Financial Partners Corp. (NYSE: NFP), a leading provider of benefits, insurance and wealth management services, today announced that it has entered into a definitive agreement with Madison Dearborn Partners, LLC, a private equity investment firm, under which a controlled affiliate of Madison Dearborn will acquire NFP.
Under the terms of the agreement, NFP shareholders will receive $25.35 in cash for each share of NFP common stock they own, in a transaction with an equity value of approximately $1.3 billion, which includes the full value of the Company’s convertible debt. The purchase price represents a premium of approximately 26 percent over NFP’s closing share price of $20.05 on March 12, 2013, the last day of trading prior to press reports that NFP was considering a possible sale of the Company.
As previously disclosed, as a result of interest it had received from private equity firms, NFP’s Board of Directors formed a special committee of independent directors to explore a possible sale of the Company. After a thorough and rigorous process, and with the assistance of its legal and financial advisors, the special committee negotiated and recommended this transaction with Madison Dearborn to the full Board. The transaction was unanimously approved by the Board.
“This compelling transaction provides shareholders with substantial value, and is a successful outcome of the thorough process undertaken by our Board,” said Jessica M. Bibliowicz , chairman and chief executive officer of NFP. “This agreement also provides significant opportunities for our clients and employees by partnering with an extremely well-respected firm with proven expertise in the financial services sector. NFP has a solid foundation, and we are confident the Company will thrive as a private enterprise in this next chapter of its evolution.”
“Madison Dearborn’s interest in NFP is a clear endorsement of the quality and success of our business, the value of our client-centric culture, and the hard work and dedication of our people. We are confident that partnering with this world-class investor will help us continue to execute on our long-term One NFP strategy and grow the business,” said Douglas W. Hammond , president and chief operating officer of NFP. As previously disclosed, the Board expects to appoint Mr. Hammond chief executive officer of NFP when Ms. Bibliowicz steps down from that role in May.
“We are pleased to have this opportunity to invest in NFP and help the Company advance its strategy,” said Vahe Dombalagian , a managing director at Madison Dearborn. “We look forward to working closely with the Company’s leadership team as it continues to build a strong diversified business. We fully support NFP’s focus on providing high-quality and value-added services to all of its clients, including corporations, through a more unified brand across its business segments.”
Madison Dearborn has obtained debt financing commitments from Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc., and UBS Securities LLC, the proceeds of which will be used to fund the transactions contemplated by the agreement and to pay related fees and expenses. Pursuant to an equity commitment letter, controlled affiliates of Madison Dearborn have committed to provide a cash investment on the terms and subject to the conditions set forth in the letter.
The transaction, which is subject to the approval of holders of a majority of the outstanding shares of NFP common stock and other customary closing conditions, is expected to close in the third quarter.
BofA Merrill Lynch served as financial advisor to the Board and the special committee, while Cleary Gottlieb Steen & Hamilton LLP was their legal counsel. Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor to the Company. UBS Securities LLC served as financial advisor to Madison Dearborn, while Ropes & Gray LLP served as its legal advisor.
National Financial Partners Corp. (NYSE: NFP), and its benefits, insurance and wealth management businesses provide diversified advisory and brokerage services to companies and high net worth individuals, partnering with them to preserve their assets and prosper over the long term. NFP advisors provide innovative and comprehensive solutions, backed by NFP’s national scale and resources. NFP operates in three business segments. The Corporate Client Group provides corporate and executive benefits, retirement plans and property and casualty insurance. The Individual Client Group includes retail and wholesale life insurance brokerage and wealth management advisory services. The Advisor Services Group serves independent financial advisors by offering broker/dealer and asset management products and services. Most recently NFP was ranked eighth on Business Insurance’s 100 Largest Brokers of U.S. Business; second on Business Insurance’s Largest Agents and Brokers Headquartered in the U.S. Northeast; and as the ninth Top Global Insurance Broker by Best’s Review; it operates the third largest executive benefits provider of nonqualified deferred compensation plans by total clients as ranked by PlanSponsor; operates a top 10 independent broker/dealer as ranked by Investment Advisor; and has three advisors ranked in Barron’s Top 100 Independent Financial Advisors. NFP is also a leading independent life insurance distributor according to many top-tier carriers. For more information, visit www.nfp.com.
About Madison Dearborn Partners
Madison Dearborn Partners, based in Chicago, is one of the most experienced and successful private equity investment firms in the United States. Since Madison Dearborn’s formation in 1992, the firm has raised six funds with aggregate capital of over $18 billion and has completed approximately 125 investments. Madison Dearborn invests in businesses across a broad spectrum of industries, including financial and transaction services; basic industries; business and government services; consumer; health care; and telecom, media and technology services. Its noteworthy investments include CapitalSource, Nuveen Investments, PayPal, TransUnion, and EVO Payments. For more information, please visit www.mdcp.com.