Merrill Lynch, the Banker (Acquiring First Republic Bank)

By Douglas A. McIntyre Published Jan 29, 9:21AM EST

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Stock Tickers: MER, FRC

Merrill Lynch is continuing to add to its wealth management operations. This morning it announced an acquistion of First Republic Bank (FRC-NYSE) for $55.00 per share in cash, or roughly $1.8 Billion in cash and stock (50/50).

First Republic is another wealth management operation that can be cheaply integrated, and by description it is a bank for high net worth individuals and their businesses. The acquisition of the San Francisco-based bank is not expected to close until the third quarter. First Republic has assets of roughly $10.7 Billion; dposits of $7.9 Billion, Loans of $7.6 Billion, and assets under management or in trust of roughly $16.35 Billion.

While this deal looks expensive on the acquisition, the company expects this to be accretive to its earnings by the end of 2008. It is also a small drop in the bucket when you consider that Merrill Lynch has an $82 Billion market Cap. This rice represents more than a 40% premium to FRC’s close, and is roughly 20% higher than its 52-week highs and all-time highs.

Jon C. Ogg
January 29, 2007

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.