Boston Private Financial Holdings Inc. announced Tuesday that it had a deal to buy Davidson Capital Management, a Philadelphia investment management company.
Including Davidson Trust Co. and Davidson Investment Counselors, the deal is Boston Private's first for a Philadelphia investment manager.
James M. Davidson, the founder and chief executive officer of Davidson, is to remain its chairman. Alvin A. Clay 3rd, a veteran Philadelphia wealth management executive, is to buy a minority interest in the firm and become Davidson's chief executive. He was the president and chief executive of Pitcairn Financial Group in Jenkintown, Pa.
Davidson Trust sells investment services to wealthy clients. The investment counselors unit is an equity and fixed-income manager. Davidson Capital Management had $1 billion of assets under management as of Nov. 1.
The deal, which is expected to close in the first quarter, is projected to be accretive to Boston Private on the basis of generally accepted accounting principles within 12 months and immediately accretive on a cash basis.
Concurrent with the deal's closing Davidson Trust and Davidson Investment Counselors are to become one firm known as Davidson Trust Co.
The agreement's terms call for Boston Private to buy a 70% interest in Davidson Trust. The remaining 30% would be owned by Mr. Davidson, Mr. Clay, and other senior executives of Davidson Capital. The company is to pay 50% of the total consideration at closing and the remaining 50% over three years. The amounts of the future payments are to be tied to Davidson Trust's growth.
