SVB Financial Group, the US-listed parent of Silicon Valley Bank, is buying Boston Private Bank & Trust Company. 

The combined organization would oversee $17.7 billion in client money . Boston Private had total client assets of $16.3 billion, according to its website. 

The parties have entered a definitive agreement. Under its terms, Boston Private shareholders will receive 0.0228 shares of SVB common stock and $2.10 of cash for each Boston Private share they own, equating to a total consideration of around $900 million based on SVB's closing stock price of $387.83 on December 31, Silicon Financial said in a statement.

“SVB's vision is to be the premier financial partner for the innovation economy, providing companies, entrepreneurs and their investors the services they need to succeed via four core businesses: commercial banking, investment banking, private banking and wealth management and fund management. The acquisition of Boston Private accelerates SVB's private bank and wealth management offering, strengthening SVB's overall platform and ability to fully meet the financial needs of its clients,” SVB said in its statement. 

Boston Private provides wealth, trust, and private banking services. SVB, founded 35 years ago, said that as a result of Boston Private’s product suite and recently redesigned technology platform, it can expand its existing wealth management solutions, which includes complex strategies to manage concentrated stock positions, add tax planning, trust services, philanthropy and estate planning.

“Unrelated to the financial terms, the strategic rationale is very sound - two private banks are combining which will create some immediate economies of scale and, most importantly, a bi-coastal franchise to rival the estimable First Republic, the category `crown jewel’,” Jamie McLaughlin, of J H McLaughlin & Co, LLC, told this publication about the transaction. 

Both companies’ boards unanimously approved the deal; the transaction is expected to close in mid-2021, subject to the satisfaction of customary closing conditions, including receipt of customary regulatory approvals and approval by the shareholders of Boston Private.

Boston Private has a leverage Tier 1 ratio – a measure of a bank’s capitalization position – of 8.5 per cent, above the 5.0 per cent regulatory minimum. It had a Tier 1 Common Equity ratio – another international yardstick of financial health – of 11.79 per cent.

Goldman Sachs acted as financial advisor to SVB in the transaction. Sullivan & Cromwell LLP served as legal counsel to SVB. Morgan Stanley & Co LLC acted as financial advisor to Boston Private and Wachtell, Lipton, Rosen & Katz served as legal counsel.

SVB Financial Group's businesses, including Silicon Valley Bank, offer commercial and private banking, asset management, private wealth management, brokerage and investment services and funds management services to companies in the technology, life science and healthcare, private equity and venture capital, and premium wine industries. The group is based in Santa Clara. Boston Private is a touch younger, founded over 30 years ago.

Boston Private last October issued a White Paper that scrutinized the mass of risks family offices face, and examines how well, or not, these organizations fare in tackling hazards such as cyberhackers, rogue staff, business disruptions and reputational damage.