Leerink Sold His Business for $280m to SVB, Now Buys It Back for $100m

<p>SVB
Financial Group acquired the investment banking division (SVB Securities) for
$280 million four years ago. Now, it has received approval from the US
bankruptcy court to resell it for $100 million. This is a further part of the
proceedings related to the <a href="https://www.financemagnates.com/terms/b/bankruptcy/">bankruptcy</a> of Silicon Valley Bank (<a href="https://www.financemagnates.com/tag/svb/" target="_blank" rel="follow">SVB</a>) in the first
half of the year.</p><p>SVB Securities Returns to
Leerink's Hands</p><p>SVB was one
of the American banks that <a href="https://www.financemagnates.com/cryptocurrency/svb-crisis-circle-escapes-usdc-depeg-with-regulatory-assurance/" target="_blank" rel="follow">declared bankruptcy in March</a>, leading to stress
spilling over into the banking sector worldwide. Now, it is
selling off parts of its assets, and according to the latest court decision, it
can resell the investment banking division.</p><p>The buyer
of the unit is Jeff Leerink, the creator of the original division.
After SVB Financial took it over a few years ago, he remained in his post and
was responsible for its further development. However, SVB has collapsed and
Leerink expressed a desire to buy back his business with the support of the
Baupost Group and executive team members. Although Silicon Valley Bank's story
did not end happily, for Leerink, the turn of events certainly proved
beneficial.</p><p>Although
the decision was first announced <a href="https://www.financemagnates.com/institutional-forex/svb-financial-group-sells-securities-division-to-its-current-chief-executive/" target="_blank" rel="follow">back in June</a>, the American bankruptcy court
initially did not want to allow the sale. This would have absolved too many
former directors of the collapsed SVB from future legal responsibility in case
of potential lawsuits related to bankruptcy.</p><p>However,
company representatives added certain restrictions to the application, positively
influencing the court's decision. Leerink is to take over the investment
banking operations in <a href="https://www.financemagnates.com/terms/e/exchange/">exchange</a> for cash, a 5% equity instrument, and the
repayment of an intercompany note.</p><p>Shortly
after <a href="https://www.financemagnates.com/institutional-forex/silicon-valley-bank-rescued-by-first-citizens-in-fdic-approved-deal/" target="_blank" rel="follow">regulators took over Silicon Valley Bank</a>, its investment banking division
declared bankruptcy. However, it presented plans to sell its non-banking assets
to repay bondholders.</p><p>SVB is Back in Germany and
the UK</p><p>SVB
Securities is another 'piece' of the collapsed Silicon Valley Bank that has
found a new owner. Finance Magnates reported in March that HSBC bought
the British branch <a href="https://www.financemagnates.com/institutional-forex/uk-silicon-valley-bank-sold-for-just-one-pound-to-hsbc/" target="_blank" rel="follow">for just one pound</a>. Subsequently, the lending giant
transformed the unit into <a href="https://www.financemagnates.com/institutional-forex/from-the-ashes-of-svb-uk-hsbc-gives-birth-to-new-innovation-banking-unit/" target="_blank" rel="follow">HSBC Innovation Banking</a>. The new division focuses on
the technology sector and innovations in the economy.</p><p>The German
SVB also survived, forming a new local branch. <a href="https://www.financemagnates.com/institutional-forex/silicon-valley-bank-is-back-in-germany-after-creating-new-subsidiary/" target="_blank" rel="follow">SVB Germany</a> has assumed the
entirety of Silicon Valley Bank Germany's business operations. Although its
American counterpart declared bankruptcy, the European subsidiary continues to
operate.</p><p>However,
SVB's problems are not over, as evidenced by an investigation <a href="https://www.financemagnates.com/institutional-forex/g20-launches-inquiry-into-svb-and-credit-suisse-amidst-global-banking-crisis/" target="_blank" rel="follow">initiated by the
G20</a>. Klaas Knot, the Chairman of the Financial Stability Board of the G20, has
announced that the reasons for the bankruptcy of the bank and its impact on the banking
sector's stability will be thoroughly examined.</p>

This article was written by Damian Chmiel at www.financemagnates.com.