TLDR:
- Silicon Valley Bank sells venture capital arm, SVB Capital, to Brookfield Asset Management and Sequoia Heritage.
- The deal includes a significant cash component and other economic considerations.
Article Summary:
Silicon Valley Bank’s parent company, SVB Financial, has reached a definitive agreement to sell its venture capital arm, SVB Capital, to an entity backed by Brookfield Asset Management and Sequoia Heritage. The financial details of the deal were not disclosed, but it includes a combination of cash and other economic considerations. SVB Financial’s Chief Restructuring Officer, Bill Kosturos, mentioned that the deal involves a significant cash component. The company entered the deal with an entity affiliated with Pinegrove Capital Partners, with SVB Capital and Pinegrove expected to continue operating independently.
The sale comes after SVB Financial filed for bankruptcy last year following the collapse of Silicon Valley Bank. The bank failure was the third-largest in U.S. history. Since then, SVB Financial has sold off its banking arm to First Citizens BancShares Inc, and its investment banking arm was sold to some of its top management. Earlier this year, SVB had signaled the possibility of letting its creditors take over its venture capital arm after initial talks for a sale to a consortium fell through.
The deal between SVB Financial, Brookfield Asset Management, and Sequoia Heritage is still subject to regulatory approval. The sale marks a significant move in the restructuring and reorganization of SVB Financial following the tumultuous events that led to the collapse of Silicon Valley Bank.
