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TD Bank To Buy Investment Bank Cowen In $1.3 Bln Cash Deal - Quick Facts

Canada's Toronto-Dominion Bank (TD.TO,TD) announced Tuesday its definitive agreement to acquire investment bank Cowen Inc. (COWN) in an all-cash transaction valued at $1.3 billion, or $39 for each share of Cowen stock.

In pre-market activity on Nasdaq, Cowen shares were gaining around 6.8 percent to trade at $37.91.

The transaction is expected to be modestly accretive to TD's 2023E adjusted EPS on a fully-synergized basis.

TD expects to achieve $300-$350 million in revenue synergies by year three, and to incur total pre-tax integration and retention costs of approximately $450 million over three years.

The transaction, which has been approved by the boards of directors of TD and Cowen, is expected to close in the first calendar quarter of 2023, subject to customary closing conditions.

Through this transaction, TD Securities will accelerate its long-term growth strategy in the United States. TD Securities will benefit from the addition of Cowen's 1,700 employees.

Once the transaction closes, Jeffrey Solomon, Chair & CEO of Cowen, will join the senior leadership of TD Securities, reporting to Riaz Ahmed, President and CEO, TD Securities and Group Head, Wholesale Banking, TD Bank Group.

Post-closing, parts of the combined business will be known as TD Cowen, a division of TD Securities, and will be headed by Solomon.

To provide the capital required for the transaction, TD has sold 28.4 million non-voting common shares of Charles Schwab Corp. for proceeds of around $1.9 billion, reducing TD's ownership interest from approximately 13.4 percent to 12.0 percent.

In the deal, Perella Weinberg Partners LP served as financial advisor to TD, and Ardea Partners and Perkins Advisors LLC served as financial advisors to Cowen.

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