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  • Seller
  • Buyer
  • Type
  • Date Announced
  • Seller AUM
  • Weston Financial Group, Inc.
  • The Washington Trust Company (Washington Trust Bancorp, Inc.)
  • Wealth Management Firms
  • March 21, 2005
  • $1.2 Billion

Seller Details

Weston Financial Group, Inc. ("WFG") is a registered investment advisor with assets under management in excess of $1.2 billion. Located in Wellesley, Massachusetts, the firm specializes in providing high-quality, comprehensive financial planning and investment counseling services to high net worth individuals through third-party open-architecture wealth management products. WFG was founded in 1979 and serves clients in the Boston Metropolitan area, New England and throughout the country.

WFG has 27 employees and is led by six principals, who have approximately 150 years of combined wealth management experience. WFG has expertise in retirement planning, estate planning, investment management, tax planning and preparation, stock option planning, and insurance analysis.

Buyer Details

Washington Trust Bancorp, Inc. is the parent of The Washington Trust Company, a Rhode Island state-chartered bank. It is the oldest community bank in the nation and was founded in 1800 by local merchants from Rhode Island and Connecticut. The bank offers a full range of financial services, including trust and investment management, through its offices in Rhode Island and southeastern Connecticut. Washington Trust Bancorp, Inc.'s common stock trades on The Nasdaq Stock Market.

Transaction Summary

Under the agreement, WFG will become a subsidiary of Washington Trust and will be operated under the direction of its current management team.   For Washington Trust, this acquisition increases the bank's assets under management by more than 50% to approximately $3.1 billion while also increasing the capabilities of the wealth management group and expanding its presence in the New England marketplace.

 

For WFG, this acquisition enables its clients to utilize Washington Trust's full line of trust, personal and business banking services.   Washington Trust customers will also be able to take advantage of the financial planning expertise offered by WFG professionals.

 

At the closing, Washington Trust will acquire all of the outstanding shares of WFG's capital stock for $20.0 million in cash, subject to customary adjustments for the percentage of investment accounts transferred and other matters.   In addition, the transaction is structured to provide for the contingent payment of additional amounts based on operating results during a three-year earn-out period ending December 31, 2008 with a guaranteed minimum payout of $6.0 million in cash over the three-year period.   Washington Trust expects to finance this transaction primarily through the issuance of trust preferred stock and other sources and does not expect to issue any common stock in connection with the transaction.   It is currently anticipated that the acquisition, which is subject to state and federal regulatory approval and other customary conditions to closing, will most likely be completed in the third quarter of 2005.   Management expects the transaction to be immediately accretive to earnings per share on a cash and GAAP basis excluding transaction-related expenses.

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