BoA sells First Republic Bank to private equity
BANK of America said yesterday it has agreed to sell First Republic Bank (FRB), the private bank and wealth manager, to a private-equity group in a deal expected to be worth over $1bn (£602m).
A consortium including General Atlantic and Colony Capital are set to take over the unit, which was originally bought by Merrill Lynch for $1.8bn in 2007.
The deal is being led by First Republic’s existing management and is expected to close in the second quarter of 2010.
First Republic was acquired by Bank of America as part of the package when it bought Merrill Lynch, in a lifeline deal at the depths of the credit crunch. The unit has been seen as a bad fit with Bank of America’s retail operations.
As of 30 September 2009 First Republic had $19bn in total assets, $16bn in deposits, and $15bn in wealth management assets.
FRB’s Jim Herbert, chairman and founding chief executive officer, will continue in his current job.
Bank of America Merrill Lynch acted as financial advisor for Bank of America. Wachtell, Lipton, Rosen & Katz acted as legal advisor to Bank of America.