BankBoston To Buy BankAmerica Unit
BOSTON (AP) _ BankBoston is buying Robertson Stephens, the investment banking unit of BankAmerica Corp., for $800 million in cash and stock options.
BankBoston has been searching for a way to expand its investment banking services. The deal announced Friday enables it to broaden its base of customers as well as widen the array of financial products that it can make available.
BankAmerica bought Robertson Stephens last year for $540 million, but put it up for sale after agreeing to merge with NationsBank of Charlotte, N.C., which owns the larger Montgomery Securities. The two securities firms are based in San Francisco.
BankBoston will pay $400 million in cash initially and another $300 million in cash over four years under the deal. It will also give BankAmerica $100 million in stock options.
The deal has to be approved by federal regulators and is expected to be completed in late 1998. BankBoston’s board approved the purchase Thursday.
``Robertson Stephens is a great fit for BankBoston,″ said BankBoston chairman and CEO Chad Gifford.
Robertson Stephens’ headquarters will remain in San Francisco, but the firm’s 67-year-old founder, Sanford Robertson, is expected to leave the company.
According to published reports, Robertson is planning to start up his own firm. Robertson has a non-competition agreement with BancAmerica Robertson Stephens through December 2000.
Robertson Stephens’ president and chief executive Mike McCaffery will continue to manage the day-to-day operations and will report to BankBoston Vice Chairman Paul Hogan.
Robertson Stephens will become part of BancBoston Securities Inc., BankBoston’s subsidiary that will be renamed BancBoston Robertson Stephens Inc.
BankBoston will retain most of Robertson Stephens’ employees associated with the firm’s investment banking operations.