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TheStreet Open House

The Edelman Financial Group Signs Going-Private Transaction

Stocks in this article: EF

HOUSTON, April 16, 2012 /PRNewswire/ -- The Edelman Financial Group Inc. ("TEFG" or the "Company") (NASDAQ: EF),  a nationwide wealth management firm, today announced that it has entered into a definitive merger agreement with affiliates of Lee Equity Partners, LLC, a private equity firm, to be acquired for $8.85 per share in cash. This represents a premium of 43% over TEFG's closing price Friday of $6.18, and a premium of 33% over TEFG's volume-weighted average closing price over the last 20 trading days.

The Edelman Financial Group Co-Chief Executive Officers Ric Edelman and George Ball, and other members of TEFG's senior management team, will continue in their roles with the Company after completion of the transaction and, pursuant to the terms of the transaction, maintain a significant equity investment in TEFG. Simultaneously with the closing of the transaction, Mr. Edelman will also be selling his 24% direct interest in The Edelman Financial Center, LLC ("EFC"), a 76%-owned subsidiary of TEFG, to an affiliate of Lee Equity Partners on substantially the same terms provided by the existing Limited Liability Company Agreement of EFC.

The merger agreement was negotiated on behalf of TEFG by a Special Committee of its Board of Directors composed entirely of independent directors with the assistance of independent financial and legal advisors. Following the Special Committee's unanimous recommendation, TEFG's Board of Directors unanimously approved the merger agreement and has recommended that TEFG's shareholders adopt and approve the merger.

Thomas H. Lee, President of Lee Equity Partners, said, "The Edelman Financial Group has achieved a strong track record and is a clear leader in the independent financial advisor field. We are excited to partner with Edelman Financial's management team, and we look forward to supporting the company's continued expansion."

Under terms of the merger agreement, each issued and outstanding share of TEFG's common stock will be cancelled in exchange for the right to receive $8.85 in cash, except for certain shares beneficially owned by management and TEFG employees that will be rolled over and contributed to the new holding company, and shares held by shareholders who properly exercise and perfect appraisal rights.

The merger agreement must be approved by a two-thirds majority of the outstanding shares of TEFG's common stock and by a majority of the outstanding shares of TEFG's common stock held by unaffiliated shareholders. Members of the Company's senior management, who currently own approximately 26% of TEFG's outstanding shares, have agreed to vote their shares in favor of the merger. This voting obligation will terminate if the merger agreement terminates.

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