Raymond James Financial to acquire TriState Capital in $1.1B cash-and-stock deal

St. Petersburg, Fla.-based Raymond James Financial Inc. has agreed to acquire Pittsburgh-based TriState Capital Holdings Inc. in a cash-and-stock transaction valued at approximately $1.1 billion.

The acquisition is expected to close in 2022.

TriState Capital will still operate as a separately branded firm and as a stand-alone division and independently chartered bank subsidiary of Raymond James. Chartwell Investment Partners LLC, a subsidiary of TriState Capital, will maintain an independent brand and management and operate as a subsidiary of Carillon Tower Advisers Inc., a unit of Raymond James, with pro forma combined assets under management of approximately $80 billion.

James Getz will remain as TriState Capital's chairman, Brian Fetterolf will stay as TriState Capital Bank's CEO and Timothy Riddle will still be Chartwell's CEO. Management and about 350 associates are expected to remain with the firm in its current office locations.

Under the terms of the agreement, TriState Capital common stockholders will receive $6.00 cash and 0.25 of a Raymond James share for each share of TriState Capital common stock, representing per-share consideration of $31.09 based on the closing price of Raymond James common stock on Oct. 19.

The deal is projected to be accretive to diluted EPS in the first full year after closing, excluding acquisition-related expenses, with over 8% accretion in diluted EPS after the third year. Accretion estimates increase by approximately 400 basis points assuming share buybacks post-closing to offset shares issued as part of the transaction consideration.

Meanwhile, a primary driver of cost synergies will replace a portion of TriState Capital Bank's current and future higher-cost deposits with Raymond James' lower-cost deposits from the Raymond James bank deposit program.

Raymond James also inked an agreement with the sole holder of the TriState Capital series C perpetual noncumulative convertible nonvoting preferred stock, under which the preferred stock will be converted to common shares at the prescribed exchange ratio and cashed out at $30 per share. TriState Capital's series A noncumulative perpetual preferred stock and series B noncumulative perpetual preferred stock will remain outstanding and be converted into equivalent preferred stock of Raymond James.

Raymond James & Associates was financial adviser and Sullivan & Cromwell LLP was legal counsel to Raymond James. Stephens Inc. was financial adviser and Mayer Brown LLP was legal counsel to TriState Capital.