Silvercrest Asset Management Group Inc. - Form 8-K Summary
Business Context and Reporting Period
This Current Report on Form 8-K was filed on April 12, 2019, by Silvercrest Asset Management Group Inc. (the "Company"). The filing discloses the entry into a Material Definitive Agreement to acquire substantially all assets of Cortina Asset Management, LLC ("Cortina"), relating to its investment management and advisory business.
Key Financial Metrics and Transaction Terms
The filing details a specific acquisition structure rather than standard periodic financial performance metrics (revenue, profit, cash flow). Key financial terms of the transaction include:
- Base Consideration: An aggregate maximum amount of $44,937,297.
- Payment Structure (Base): 80% paid in cash at closing; 20% paid via issuance of Class B Units in Silvercrest L.P. to certain Cortina interest holders.
- Contingent Consideration (Earn-out): Up to an additional $26,209,243 payable over four years, structured as 80% cash and 20% Class B Units.
- Securities Issuance: The Class B Units issued represent more than 5% of the currently outstanding Class B Units of Silvercrest L.P. Each unit is exchangeable for one share of the Company's Class A common stock.
Material Changes and Conditions
The transaction represents a material expansion of the Company's asset base and business operations. The closing is anticipated to occur no later than 120 days from the agreement date, subject to customary conditions including:
- Receipt of required third-party consents.
- Absence of injunctions or litigation challenging the transaction.
- Absence of a material adverse change regarding Cortina or the Purchaser.
- Execution of employment agreements with certain Cortina employees.
Outlook, Management Commentary, and Risks
Management has committed to retaining key Cortina employees with compensation arrangements substantially similar to current terms for one year post-closing. The Company covenants to conduct the acquired business consistent with Cortina's prior operations for four years to protect earn-out payments. The issuance of securities is exempt from registration under Section 4(2) of the Securities Act as it does not involve a public offering. A press release regarding this transaction was issued on April 15, 2019.
Investor Verification Checklist
- Verify the final closing date and whether the 120-day deadline is met.
- Confirm the exact number of Class B Units issued and the resulting dilution to existing shareholders.
- Monitor the satisfaction of closing conditions, specifically third-party consents and employee retention agreements.
- Review the full text of the Asset Purchase Agreement (Exhibit 2.1) for specific earn-out performance metrics.
- Assess the impact of the acquisition on the Company's future liquidity and capital structure.