SVB to Acquire Leerink Partners for $280 Million to Expand Healthcare Investment Banking Capabilities

Recently, VCBeat (WeChat Official Account: vcbeat) learned through inquiries to foreign media that on November 14, 2018, local time, SVB Bank, headquartered in Santa Clara, California, announced that it had reached an acquisition agreement with Leerink, headquartered in Boston. Under the terms of the agreement, SVB will acquire Leerink Partners for $280 million in cash plus a $60 million earn-out payable over five years. The leadership team of Leerink Partners will remain in place and continue to operate businesses “substantially similar in nature” to current operations. SVB’s share price fell 2% in early trading on the day following the announcement of the acquisition agreement.

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“SVB and Leerink are jointly committed to providing financing strategy advice during the critical stages of a company’s growth and development,” said Greg Becker, CEO of SVB, in a statement. “We will work together to offer comprehensive capital markets solutions—including debt, convertible notes, and equity financing—as well as M&A advisory services to private and public healthcare and life sciences companies.”

According to the website, 50% of Silicon Valley Bank’s clients, which has a 35-year history, are U.S. life sciences companies backed by venture capital, while the other 50% are venture capital firms that had their initial public offering (IPO) in 2017.

According to SVB, the acquisition of Leerink will diversify SVB’s revenue streams and increase non-interest income. As of the end of September, Leerink’s non-interest income stood at $263 million, compared with SVB’s $711 million; the majority of SVB’s revenue (over $1.7 billion) was derived from net interest income.

Jeffrey Leerink founded Leerink Partners in 1995. Recently, the investment bank has been involved in transactions within the biopharmaceutical and diagnostic tools sectors, including initial public offerings (IPOs) such as Guardant Health’s $273 million IPO last month, Equalium’s $65 million IPO, and Pripiia Biphorma’s $122 million IPO in September. Leerink also played a significant role in Evolent Health’s acquisition of New Century Health and NEO’s acquisition of the clinical oncology laboratory Genoptix.

Leerink Partners is a leading investment bank that specializes in providing capital markets, mergers and acquisitions, equity research, and sales and trading services to companies in the healthcare industry.

Principia Biopharma is a clinical-stage biopharmaceutical company dedicated to developing novel therapies in immunology and oncology.

Boston Scientific, headquartered in Marlborough, Massachusetts, USA, is a medical device manufacturer specializing in the research and development, production, and sales of minimally invasive interventional medical devices.