| Item 1.01. |
Entry into a Material Definitive Agreement. |
As previously reported, on March 17, 2023, SVB Financial Group (the “Company”) filed a voluntary petition in the United States Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”) for relief under the provisions of Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). The Company’s case is administered under the caption In re SVB Financial Group, Case No: 23-10367 (the “Chapter 11 Case”). The Company is continuing to operate its remaining businesses, including SVB Capital, its venture capital and private credit fund business, and SVB Securities, an investment banking business, as a debtor in possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court.
On June 17, 2023, the Company entered into a definitive purchase agreement (the “Purchase Agreement”) with the management team bidder group led by Jeff Leerink, SVB Securities’ Chief Executive Officer and Founder, and backed by funds managed by The Baupost Group L.L.C., for the sale of SVB Securities. The Purchase Agreement for the management-led buyout was selected as the successful bid for SVB Securities following a competitive bidding process conducted under procedures approved by the Bankruptcy Court.
Under the terms of the Purchase Agreement, the bidder group will acquire the SVB Securities investment banking business for a combination of cash, the assumption of certain liabilities, and a synthetic equity instrument initially representing a 5% equity interest in the direct parent of the buyer entity. The Purchase Agreement is subject to final approval of the Bankruptcy Court and regulatory approval, as well as other customary closing conditions. MoffettNathanson LLC, a sell-side research business owned by the Company, is not included in the transaction and will remain part of SVB Financial Group.
A hearing to seek required Bankruptcy Court approval is scheduled for June 29, 2023, and the transaction is expected to close shortly thereafter. SVB Financial Group is continuing to evaluate strategic alternatives for SVB Capital and the Company’s other assets and investments.
The foregoing description of the Purchase Agreement does not purport to be complete and is qualified in its entirety by the full text of the Purchase Agreement, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
The Purchase Agreement has been filed with this Current Report on Form 8-K to provide investors and security holders with information regarding the terms of the Purchase Agreement. It is not intended to provide any other factual information about the parties. The representations, warranties and covenants contained in the Purchase Agreement were made only for purposes of the Purchase Agreement and as of the specific date therein, were solely for the benefit of the parties to the Purchase Agreement and may be subject to important limitations agreed upon by the contracting parties. The representations and warranties may have been made for the purposes of allocating contractual risk between the parties to the Purchase Agreement instead of establishing these matters as facts and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors. Investors are not third-party beneficiaries under the Purchase Agreement and should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or its subsidiaries. Moreover, information concerning the subject matter of such representations, warranties and covenants may change after the date of the Purchase Agreement containing them, which subsequent information may or may not be fully reflected in the Company’s public disclosures.