Business Context and Reporting Period
Company: Evercore Partners Inc.
Filing Type: Form 8-K (Current Report)
Date of Report: August 19, 2011
Event: Completion of the acquisition of The Lexicon Partnership LLP ("Lexicon"), a U.K. incorporated limited liability partnership.
Key Financial Metrics and Transaction Details
This filing details the consideration paid for the Lexicon acquisition rather than standard periodic financial metrics (revenue, profit, cash flow) for Evercore.
- Total Consideration: Approximately £46.1 million in cash and 1,911,360 shares of Evercore Class A common stock.
- Closing Payment: £31.6 million in cash and 27,867 Class A Shares paid/issued at closing.
- Deferred Cash Payment: Approximately £5.6 million payable on December 31, 2011.
- Deferred Consideration (Vesting): Approximately £8.9 million in cash and 1,883,493 Class A Shares to vest over four years beginning June 30, 2012. These amounts will be expensed over the vesting period.
- Debt Repayment: Evercore funded the repayment of £5.0 million of outstanding Lexicon capital notes at closing.
Material Changes and Operational Updates
The primary material change is the expansion of Evercore's European Advisory business through the acquisition of Lexicon.
- Leadership Appointments: Andrew Sibbald (former Senior Partner of Lexicon) became CEO of Evercore Partners International LLP ("Evercore LLP"). Bernard Taylor became Chairman of Evercore LLP.
- Structural Changes: Members of Lexicon became individual members of Evercore LLP. The Limited Liability Partnership Deed of Evercore LLP was amended and restated.
- Future Earnings Impact: The anticipated impact on earnings is dependent upon Lexicon achieving certain projected levels of growth.
Guidance, Risks, and Contingencies
Forward-Looking Statements: The filing contains forward-looking statements regarding operations and financial performance, subject to risks and uncertainties.
- Financial Statement Filing: Financial statements of the acquired business and pro forma financial information are not included in this filing. They are expected to be filed by amendment within 71 days of this report.
- Risk Factors: Actual results may differ materially from projections due to factors described in the 2010 Form 10-K and subsequent Form 10-Q filings.
- Vesting Acceleration: Deferred consideration (cash and shares) may accelerate upon a seller's termination without cause, qualifying retirement, or a change of control.
Investor Verification Checklist
- Verify the final valuation of the £46.1 million cash and stock consideration based on the share price at closing and subsequent vesting dates.
- Monitor the upcoming amendment to this 8-K (due within 71 days) for the required financial statements of Lexicon and pro forma financial information.
- Review the "Risk Factors" in Evercore's most recent Form 10-K and 10-Q to understand specific risks associated with the integration of Lexicon.
- Track the vesting schedule of the deferred £8.9 million cash and 1,883,493 shares to assess future expense recognition.