The PNC Financial Services Group, Inc. (NYSE: PNC) announced today it has signed a definitive agreement to sell J.J.B. Hilliard, W.L. Lyons, Inc., a full-service brokerage and financial services provider headquartered in Louisville, Ky., to Bowling Green, Ky.-based Houchens Industries, Inc.
Hilliard Lyons has more than 1,000 employees, including 411 financial consultants, with 76 branch offices, mainly in states outside of PNC's retail banking footprint.
"Our strategy is to grow client relationships in our retail banking footprint where we have a competitive advantage and to maintain a disciplined approach to capital management. This transaction allows us to do both," said PNC President Joseph C. Guyaux, who leads Retail Banking.
As a result of the sale, PNC expects to report an after-tax gain of approximately $50 million and increase its tangible capital position by approximately $140 million after the elimination of goodwill recorded upon the purchase of Hilliard Lyons in 1998. The transaction is estimated to be completed in the first quarter of 2008 subject to regulatory and certain other required approvals.
"With this transaction, Hilliard Lyons will retain its name, employees, management team, and valuable franchise. In addition we believe the proposed ownership, which will include employees of the company, provides Hilliard Lyons with a tremendous opportunity to chart a course for growth and success with the support of Houchens," said Jim Allen, chief executive officer of Hilliard Lyons. Allen added that the 150-year-old company will remain headquartered in Louisville.
PNC will continue to offer Wealth Management and Investment products and services as part of the Retail Bank. Following the transaction, Hilliard Lyons will continue to supply PNC Investments with back office and other support services. PFPC Worldwide Inc., PNC's provider of global fund services, will remain as Hilliard Lyons' source of separate account management for its clients' third-party asset management relationships.
Credit Suisse and Wachtell Lipton Rosen & Katz, respectively, acted as the financial and legal adviser to PNC. BKD, LLP and Deutsche Bank Securities Inc. served as financial advisers and Wyatt, Tarrant & Combs, LLP acted as legal adviser to Houchens.
The PNC Financial Services Group, Inc. (http://www.pnc.com/) is one of the nation's largest diversified financial services organizations providing retail and business banking; specialized services for corporations and government entities, including corporate banking, real estate finance and asset-based lending; wealth management; asset management and global fund services.
SOURCE: The PNC Financial Services Group, Inc.
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