Alesco Financial Inc. and Cohen & Company Agree to Merge
20 Fevereiro 2009 - 8:13PM
PR Newswire (US)
Transaction Expected to be Accretive to AFN Shareholders Who are
Expected to Benefit from Significant Cost Savings, Diversified
Revenue and Fee Income Streams PHILADELPHIA, Feb. 20
/PRNewswire-FirstCall/ -- Alesco Financial Inc. (NYSE:AFN), a
specialty finance real estate investment trust externally managed
by Cohen & Company, a privately-held investment firm
specializing in credit related fixed income investments, today
announced the signing of a definitive merger agreement between the
two companies. AFN's Board of Directors and Cohen & Company's
Board of Managers have each unanimously approved the transaction.
Cohen & Company will merge with a wholly-owned subsidiary of
AFN and will survive the merger as a subsidiary of AFN. In the
merger, members of Cohen & Company will have the option to
exchange each of their membership units in Cohen & Company for
either shares of common stock of AFN, or replacement units of
membership interest in Cohen & Company which may be exchanged
into shares of AFN in the future. Holders of common stock of AFN
will continue to hold their shares of AFN. AFN will continue to be
a publicly traded entity and is expected to operate as a C-Corp for
tax purposes. Pursuant to the merger agreement, AFN will complete a
1 for 10 reverse split of its common stock. It is currently
expected that former shareholders of AFN will own 62.4% of the
shares of AFN's common stock immediately after the merger and
former unit holders of Cohen & Company will hold the balance;
however, the actual percentages will not be known until members of
Cohen & Company have made their elections to receive AFN common
stock or replacement units of Cohen & Company. If all Cohen
& Company membership interests were to be converted into AFN
shares, current AFN shareholders would own 38.5%, and former Cohen
& Company members would own 61.5%, of the combined company.
Cohen & Company will be treated as the acquirer for accounting
purposes. The terms of the merger agreement include a "Go Shop"
provision for AFN to pursue superior merger or other strategic
opportunities for a period of 40 days from the date of the
execution of the merger agreement. The Special Committee of the
Board of Directors of AFN has instructed its investment banker,
Stifel, Nicolaus & Company, Incorporated, to assist the Special
Committee in evaluating any potentially superior opportunities.
Upon the closing of the transaction, Daniel Cohen, Chairman of
Cohen & Company, will retain the role of Chairman and assume
the role of Chief Executive Officer of AFN. Christopher Ricciardi,
Chief Executive Officer of Cohen & Company, will serve as
President of AFN and Chief Executive Officer of the combined
company's Capital Markets business. Joseph Pooler, Chief Financial
Officer of Cohen & Company, will become the Chief Financial
Officer of AFN. In the near term, the merger of the two companies
is expected to provide the combined entity with enhanced financial
resilience, synergies and economies of scale to better manage
through current market conditions. The transaction is expected to
be accretive to AFN shareholders. AFN's business model will shift
from a capital investment company to an operating company with
various types of revenue streams and positive cash flow from
operations. Over the medium to long term, the combination creates a
platform specializing in credit related fixed income trading and
management and a combined company with greater capital resources to
pursue opportunistic initiatives in a distressed market, which may
include potential acquisitions of other asset management and
investment firms. Daniel Cohen, Chairman of AFN and Cohen &
Company, said, "This agreement is a critical milestone towards a
transaction that we believe will preserve value for AFN
shareholders in the near-term, while providing significant
potential value enhancement opportunities over the medium to long
term. The fixed income and structured credit markets continue to be
faced with significant challenges and dislocation. For companies
with deep industry expertise and financial resources, this
dislocation creates multiple opportunities for: value creation
through strategic investments and acquisitions at attractive
valuations; providing credit fixed income trading services to
institutional investors that are currently underserved in this
space; recruiting and retaining the best and brightest in the
industry; and originations and underwriting of debt issuances as
required by clients." Lance Ullom, Chairman of the Special
Committee of the Board of Directors of AFN -- a group comprised
solely of independent directors that negotiated the transaction on
behalf of AFN and recommended it to the AFN Board of Directors --
said, "After an extensive review process undertaken in consultation
with our independent financial and legal advisors, and following
our examination of a broad range of strategic alternatives, the
independent committee of AFN's Board has unanimously concluded that
this transaction offers AFN shareholders the best route forward for
both near-term value preservation and long run value creation.
Through this transaction, AFN shareholders will transition from
ownership of a passive investment entity with a portfolio of credit
sensitive investments to being the owners of an operating company
that we believe is positioned for future growth." The merged
company will generate diversified revenue and fee income streams
through the following three operating segments: -- Capital Markets
-- This business consists of sales and trading, as well as
origination, structuring, and placement of fixed income securities
through Cohen & Company's broker dealer subsidiary, Cohen &
Company Securities, LLC. Additionally, this business provides
corporate debt originations and new issue securitizations for a
wide variety of corporate clients with a historical focus on the
financial services industry. -- Asset Management -- This business
serves the needs of client investors by managing assets within a
variety of investment vehicles, including investment funds,
permanent capital vehicles, and collateralized debt obligations.
This business will also seek to generate fee income through
strategic "roll up" acquisitions of credit fixed income contracts
at attractive valuations and through the seeding and formation of
additional investment vehicles. -- Principal Investing -- This
business is comprised primarily of AFN's investment portfolio and
Cohen & Company's seed capital in certain investment vehicles
and the related gains and losses that they generate. The
transaction, which is expected to close during the second half of
2009, is subject to a number of closing conditions, including the
receipt of third party consents and other conditions set forth in
the definitive agreement. In addition, the transaction is subject
to approval by the affirmative vote of a majority of the votes cast
by holders of AFN common stock, provided that the number of votes
cast on the matter is over 50% of the votes entitled to be cast on
the proposal. A meeting of AFN stockholders to consider and vote on
the transaction is expected to be held in the second half of 2009.
The special committee of AFN's Board was provided a fairness
opinion for the proposed transaction by Stifel, Nicolaus &
Company, Incorporated, and Cooley Godward Kronish LLP served as its
independent counsel. Clifford Chance US LLP served as AFN's legal
advisor. WolfBlock LLP served as legal advisor to Cohen &
Company. Conference Call AFN will host a listen-only conference
call on Monday, February 23, at 10:00 a.m. Eastern Time. Interested
parties can listen to the live webcast of our conference by
clicking on the webcast link on AFN's Homepage at
http://www.alescofinancial.com/. A presentation describing the
transaction and the pro forma combined company will also be
available on our homepage. The conference call may also be accessed
by dialing 866-831-6272 or, for those calling from overseas,
617-213-8859 about 10 minutes in advance of the scheduled time. A
replay of the conference call will be available for two weeks at
888-286-8010, pass code 38055071. Additional Information About the
Merger and Where to Find It In connection with the proposed merger,
AFN will file with the SEC a Registration Statement on Form S-4
which will include proxy statements of AFN and Cohen & Company
and a prospectus of AFN. STOCKHOLDERS ARE URGED TO READ THE PROXY
STATEMENT/PROSPECTUS CAREFULLY AND IN ITS ENTIRETY WHEN IT BECOMES
AVAILABLE BECAUSE IT WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION. The definitive proxy statement will be mailed
to AFN's stockholders. In addition, stockholders will be able to
obtain the proxy statement/prospectus and all other relevant
documents filed by AFN with the SEC free of charge at the SEC's
website http://www.sec.gov/ or from Alesco Financial Inc., Attn:
Investor Relations, 2929 Arch Street, 17th Floor, Philadelphia, PA
19104. Participants in the Solicitation AFN's and Cohen &
Company's directors, executive officers and other members of
management and employees may be deemed to be participants in the
solicitation of proxies from the stockholders of AFN in favor of
the proposed merger. Information about the directors and executive
officers of AFN and their ownership of AFN stock is set forth in
AFN's proxy statement filed with the SEC on April 29, 2008.
Investors may obtain additional information regarding the interests
of such participants by reading the proxy statement/prospectus for
the proposed merger when it becomes available. Stockholders may
obtain these documents from the SEC or AFN using the contact
information above. Forward-Looking Statements Information set forth
in this release contains forward-looking statements, which involve
a number of risks and uncertainties. AFN cautions readers that any
forward-looking information is not a guarantee of future
performance and that actual results could differ materially from
those contained or implied in the forward-looking information. Such
forward-looking statements include, but are not limited to,
statements about the benefits of the business combination
transaction involving AFN and Cohen & Company, 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: factors that affect the timing or
ability to complete the transactions contemplated herein; the
ability of both companies to satisfy all necessary closing
conditions, including obtaining a financing commitment; the risk
that the business will not be integrated successfully; the risk
that cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
disruption from the transaction making it more difficult to
maintain relationships with lenders, other counterparties, or
employees; competition and its effects on pricing, spending,
third-party relationships and revenues; the failure of the
companies to successfully execute their business plans, gain access
to additional financing and the cost of capital. Additional factors
that may affect future results are contained in AFN's filings with
the SEC, which are available at the SEC's website
http://www.sec.gov/. All future written and oral forward-looking
statements attributable to us or any person acting on our behalf
are expressly qualified in their entirety by the cautionary
statements contained or referenced above. New risks and
uncertainties arise from time to time, and it is impossible for us
to predict these events or how they may affect us. We assume no
obligation to update any forward-looking statements or other
information in this press release. About Cohen & Company Cohen
& Company is an investment firm specializing in credit related
fixed income investments with approximately $23 billion in assets
currently under management in credit securities and other funds and
investments across multiple asset classes. Through Cohen &
Company Securities, LLC, the company also provides institutional
broker-dealer services focused on debt securities. With offices in
Philadelphia, New York, Chicago, Los Angeles, Washington DC, Paris,
London and Tokyo, Cohen & Company serves a diverse
international network of institutional and individual clients. For
more information about Cohen & Company, we encourage you to
visit http://www.cohenandcompany.com/. About Alesco Financial Inc.
Alesco Financial Inc. (NYSE:AFN) is a specialty finance real estate
investment trust (REIT) that focuses on investments in Trust
Preferred Securities (TruPS), Mortgage Backed Securities (MBS) and
Corporate Loan Obligations (CLO). AFN is externally managed by
Cohen & Company. Contact: Alesco Financial Investor Relations
John Longino Chief Financial Officer, Alesco Financial Inc.
215-701-8952 Cohen & Company / Alesco Financial Media Relations
Joseph Kuo / David Lilly Kekst and Company 212-521-4863 DATASOURCE:
Alesco Financial Inc. CONTACT: Alesco Financial Investor Relations,
John Longino, Chief Financial Officer, Alesco Financial Inc.,
+1-215-701-8952, ; or Cohen & Company / Alesco Financial Media
Relations, Joseph Kuo, , or David Lilly, both of Kekst and Company,
+1-212-521-4863 Web Site: http://www.alescofinancial.com/
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