TriState in Pennsylvania Buying Investment Firm for $60M

TriState Capital (TSC) in Pittsburgh has agreed to buy Chartwell Investment Partners, an investment management firm in Berwyn, Pa.

The $2.2 billion-asset TriState will pay $60 million for Chartwell, including a purchase price of $45 million in cash and an estimated earn-out consideration of roughly $15 million. TriState can elect to use its stock to pay up to 60% of the earn-out. The transaction is expected to close in the first quarter, though it requires consent from certain Chartwell clients.

Chartwell, which focuses on public mutual funds, corporations, Taft-Hartley funds, endowments and foundations, has more than 150 institutional clients and about $7.5 billion in assets under management. The company's annual revenue for last year should exceed $25 million.

TriState, which held an initial public offering last spring, said in a press release Tuesday that it had been "actively evaluating investment management firms" as part of a strategy to "profitably accelerate recurring fee-income growth." The company said the acquisition should be 25% accretive to its earnings per share in the first year after the deal is completed.

"Chartwell's partners and employees have built a world-class investment management firm," TriState Chief Executive James Getz said in the release. "The acquisition... will enhance TriState Capital's recurring fee income, provide new product offerings for our national network of financial intermediaries and leverage our financial services distribution capabilities."

TriState’s legal advisor was Keevican Weiss Bauerle & Hirsch; Stephens Inc. was the financial advisor. Chartwell's legal advisor was Pepper Hamilton.