Sandler O'Neill + Partners said on Thursday that Kelso & Co. and The Carlyle Group will invest in the 22-year old investment banking firm which caters to U.S. banks and thrifts.
Specifics of the transaction were not disclosed, but Sandler O'Neill said in a press release that the minority equity investment will be "substantial." The deal is to close by year-end.
"The investment will help support the next level of growth and expansion," Sandler O'Neill said in a press release.
Sandler O'Neill's current management team, led by James J. Dunne III and Jonathan Doyle, will remain in place and continue to make all strategic and management decisions for the firm. All of the existing partners at Sandler O'Neill are participating in the proposed transaction and, in addition to retaining a majority of their partnership interests, they agreed to a multi-year non-compete allowing for even greater stability amongst the partners.
"Sandler O'Neill has built an impressive franchise over the last two decades," Olivier Sarkozy, managing director and head of global financial services for The Carlyle Group, said in the press release.
In equity capital raising, Sandler O'Neill managed more public offerings for depository institutions to date in 2010 than any other investment bank, with 26 transactions that raised approximately $8.5 billion for clients.
Sandler is hungry to expand but its senior executive have said it is committed to remaining a private partnership.
Sandler O'Neill is the No. 1 advisor on bank & thrift mergers this year as measured by aggregate deal value. The firm has advised on 21 mergers worth an aggregate of $2.4 billion.
Wachtell, Lipton, Rosen & Katz is legal advisor to Sandler O'Neill in connection with the transaction. Debevoise & Plimpton LLP is legal advisor to Kelso and Simpson Thacher & Bartlett LLP is legal advisor to Carlyle.
