[January 01, 2015] |
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Hilltop Holdings Inc. Completes Acquisition of SWS Group, Inc.
Hilltop Holdings Inc. (NYSE: HTH) ("Hilltop"), the parent company of
PlainsCapital Corporation ("PlainsCapital"), today announced that it has
completed its acquisition of Dallas-based SWS Group, Inc. ("SWS").
PlainsCapital, through its operating subsidiaries PlainsCapital Bank and
PrimeLending, provides banking and mortgage origination, respectively.
SWS's banking subsidiary, Southwest Securities, FSB, has been merged
into PlainsCapital Bank, which will now be the 5th largest
Texas-based bank by deposits1.
SWS's broker-dealer subsidiaries, Southwest Securities, Inc. and SWS
Financial Services, Inc., became subsidiaries of Hilltop Securities
Holdings LLC, a holding company directly under Hilltop and the successor
of SWS in the merger. In connection with the merger, First Southwest
Company and its related entities also became subsidiaries of Hilltop
Securities Holdings LLC. Subsequent to the closing of this transaction,
First Southwest and Southwest Securities will continue to operate as
separate broker-dealers, under combined leadership, until such time as
the necessary regulatory approvals are obtained and systems integrations
are complete.
Under the terms of the merger agreement, SWS stockholders will receive
per share consideration of 0.2496 shares of Hilltop common stock and
$1.94 of cash, equating to $6.92 per share based on Hilltop's closing
price on December 31, 2014. The merger consideration, including
Hilltop's existing investment in SWS, is approximately $350 million2.
"We are excited to close our acquisition of SWS, as this is a
significant milestone for Hilltop. The SWS employees, customers and
shareholders have been anticipating the closing, so I now want to
welcome them to Hilltop and our family of companies. We look forward to
bringing together the best of both firms and are confident in our
capable and proven management team to work through this integration."
said Gerald J. Ford, Chairman of Hilltop.
Hilltop also is pleased to announce management of the broker-dealers who
will lead integration of the companies and the eventual combined
broker-dealer. Hill Feinberg will lead the combined broker-dealer as
Chairman and CEO, responsible for management of the firm and reporting
to Hilltop CEO Jeremy B. ord. This will be a continuation of Mr.
Feinberg's current role with First Southwest, as he has served as
Chairman and CEO of First Southwest since 1991. Before joining First
Southwest, Mr. Feinberg was a senior managing director at Bear Stearns &
Co. and a vice president and manager of Salomon Brothers in the Dallas
office. Jim Ross will serve as Vice Chairman and also will be charged
with leading the Retail division. Robert Peterson, who has extensive
broker-dealer experience in previous roles at Piper Jaffray Companies,
has been brought in to be the President and COO, with significant
responsibility for ensuring effective and efficient integration of the
broker-dealers. John Muschalek will be the new Chief Administrative
Officer, with direct oversight of Clearing, Stock Loan, IT and
Operations. Mike Edge will serve as CFO, overseeing all finance and
accounting as well as human resources. Allen Tubb has been selected to
lead the legal efforts of the new firm as General Counsel.
Stephens Inc. acted as financial advisor to Hilltop, and Wachtell,
Lipton, Rosen & Katz acted as legal advisor. Sandler O'Neill & Partners,
L.P. acted as financial advisor to the Special Committee of the SWS
Board of Directors, and Davis Polk & Wardwell LLP acted as legal advisor.
About Hilltop
Hilltop Holdings is a Dallas-based financial holding company. Through
its wholly owned subsidiary, PlainsCapital Corporation, a regional
commercial banking franchise, it has two operating subsidiaries:
PlainsCapital Bank and PrimeLending. Under Hilltop Securities Holdings
LLC, First Southwest and Southwest Securities provide a full complement
of securities brokerage, institutional and investment banking services
in addition to clearing services and retail financial advisory. Through
Hilltop Holdings' other wholly owned subsidiary, National Lloyds
Corporation, it provides property and casualty insurance through two
insurance companies, National Lloyds Insurance Company and American
Summit Insurance Company. At September 30, 2014 and prior to the SWS
transaction, Hilltop employed approximately 4,400 people and operated
approximately 400 locations in 45 states. Hilltop Holdings' common stock
is listed on the New York Stock Exchange under the symbol "HTH." Find
more information at Hilltop-Holdings.com, PlainsCapital.com, Firstsw.com
and Swst.com.
Cautionary Statement Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause Hilltop's actual
results, performance or achievements to be materially different from any
expected future results, performance, or achievements. Forward-looking
statements speak only as of the date they are made and, except as
required by law, Hilltop does not assume any duty to update forward
looking statements. Such forward-looking statements include, but are not
limited to, statements about the business combination transaction
involving Hilltop and SWS, including future financial and operating
results, the combined company's plans, objectives, expectations and
intentions and other statements that are not historical facts. The
following factors, among others, could cause actual results to differ
from those set forth in the forward-looking statements: (i) the risk
that the benefits from the transaction may not be fully realized or may
take longer to realize than expected, including as a result of changes
in general economic and market conditions, interest and exchange rates,
monetary policy, laws and regulations and their enforcement, and the
degree of competition in the geographic and business areas in which
Hilltop and subsidiaries operate; (ii) the ability to promptly and
effectively integrate the businesses of Hilltop and SWS; (iii) the
reaction of the companies' customers, employees and counterparties to
the transaction; and (iv) diversion of management time on
integration-related issues. For more information, see the risk factors
described in the registration statement on Form S-4 filed by Hilltop and
Hilltop's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and
other filings with the Securities and Exchange Commission.
1 Pro forma deposit ranking per SNL
2 Based on Sep. 30, 2014 SWS shares
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