Dekania Corp. (stock symbol: [t]DEK[/t]), which raised $99.6 million when it went public inb February 2007, has announced that it has agreed to acquire Advanced Equities Financial Corp., "a leading provider of annuities, investment management, pension administration, securities brokerage and venture capital investment banking services."
Dekania Corp. and Advanced Equities Financial Corp. Agree to Merge
Tuesday September 16, 6:00 pm ET
PHILADELPHIA and CHICAGO, Sept. 16 /PRNewswire-FirstCall/ -- Advanced Equities Financial Corp. ("Advanced Equities"), and Dekania Corp. (Amex: DEK - News, DEK.U - News, DEK.WS - News; "Dekania") announced today that they have entered into a definitive agreement under which the companies will merge. Upon completion of the merger the combined entity will be known as Advanced Equities Financial Corp., and will be led by the current Advanced Equities senior management team.
Advanced Equities Financial Corp. is a leading provider of annuities, investment management, pension administration, securities brokerage and venture capital investment banking services through its wholly owned subsidiaries: Advanced Equities, Inc.; First Allied Securities, Inc.; Advanced Equities Asset Management, Inc.; and Advanced Equities Wealth Management, Inc. Combined, Advanced Equities companies represent an independent brokerage force with approximately 900 financial advisors in 450 locations throughout the United States Additional information is available at www.advancedequities.com.
The initial merger consideration, some of which is payable to the current stockholders of Advanced Equities, and some of which will be reserved for the current warrant and option holders of Advanced Equities, consists of 20,000,000 shares of Dekania common stock. Advanced Equities' stock, option and warrant holders will also be eligible to receive up to an additional 12,500,000 Dekania shares. Up to 7,500,000 of these additional shares may be received based on Advanced Equities' achieving a certain Adjusted GAAP Net Income threshold in 2008. If fewer than 7,500,000 additional shares are issued based on 2008 Adjusted GAAP Income, the balance of those shares will be forfeited unless the targeted Adjusted GAAP Income levels below are achieved by the post-merger company in any one of the years 2009, 2010 or 2011 in which case such remaining shares will also be issued. The remaining 5,000,000 may be earned if the post-merger company achieves an Adjusted GAAP Net Income of $29.1 million in 2009, or $34 million in 2010 or $37.3 million in 2011.
Cohen Bros. Acquisitions, LLC, Dekania's sponsor, has agreed to defer 425,000 of its shares subject to the same 2009, 2010 and 2011 earnings targets.
At closing, Dekania expects that it will have approximately $94,500,000 in cash net of the payment of the expenses of the transaction. Such cash will be available for redemption of "no" votes or exercise of dissenters' rights, reduction or elimination of existing debt at Advanced Equities and for future acquisitions as management continues to grow the company.
The merger is subject to the approval by both companies' stockholders, regulatory approvals and the satisfaction of customary closing conditions
"This transaction is an important step in the continued development of Advanced Equities Financial Corp.," said Dwight O. Badger, Co-founder and Chief Executive Officer of Advanced Equities. Mr. Badger added, "The capital, public currency and brand enhancement of this transaction will help fuel our future growth and provide additional flexibility to take advantage of strategic opportunities as they arise."
Tom Friedberg, Chairman, President and CEO of Dekania commented, "With the changing dynamics in the Property and Casualty insurance marketplace and insurance underwriting in general, we refocused our efforts on insurance distribution. With Advanced Equities, we not only found an extensive distribution network that sells large amounts of annuities, insurance and other financial services products, but also a unique business model that features venture capital banking and pension administration services in addition to the rapidly growing network of independent financial advisors which results in what we believe is an excellent investment opportunity for Dekania's stockholders."
Keefe, Bruyette & Woods, Inc. served as exclusive financial advisor to Advanced Equities Financial Corp. in conjunction with the transaction.
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