$320 million Deal Value

has been acquired by

has been acquired by

Financial advisor to SoundView Technology Group

January 2000

Freeman & Co. Acted as Financial Advisor to SoundView Technology Group, Inc.
January 2000
Sell-Side M&A
Deal Value

Wit Capital to acquire SoundView Technology Group - landmark transaction creates leading internet / technology investment banking firm

November 1, 1999 (New York, NY) - Wit Capital Group, Inc. (Nasdaq: WITC), parent company of pioneering online investment banking firm Wit Capital Corporation, today announced it has signed a definitive agreement to acquire SoundView Technology Group, a Connecticut-based private investment banking firm focused exclusively on technology. The acquisition will enable Wit Capital to significantly expand its Internet-based product offering -- both in terms of number of shares distributed to online investors and breadth of timely research coverage broadly accessible through the Internet. The acquisition positions Wit Capital to be a the market leader in Internet/technology investment banking -- with one of the largest banking and research groups on Wall Street focused exclusively on the Internet and technology. The companies had combined nine-month revenues totaling over $125 million and have separately lead or co-managed over 75 deals year to date.

Under the terms of the transaction, Wit Capital will acquire 100% of the fully diluted shares of SoundView in exchange for approximately $320 million (based on Wit Capital's closing price of $17.56 on 10/29/99) in newly issued Wit Capital Common Shares and options. The exchange ratio in the merger is subject to adjustment for changes in Wit Capital's trading price from $17.56 up to $18.56 or down to $15.56 and is not adjustable for changes beyond these levels. The Board of Directors of each company and the shareholders of SoundView have approved the transaction, which is expected to close in January 2000. Completion is contingent on Wit Capital shareholder approval, regulatory approval and other customary closing  conditions. Russell Crabs, President and CEO of SoundView, will take a seat on Wit Capital's Board of Directors and Curt Snyder, Chief Operating Officer of SoundView, will become Chief Financial Officer of the combined entity upon completion of the transaction.

The synergies between Wit Capital and SoundView result in a combined company that has both a broad distribution channel through the Internet to individuals, and well established access to the largest institutional Internet and technology investors. Wit Capital's focus is on the Internet sector and retail distribution. SoundView complements Wit Capital's strengths by adding expertise in core technology sectors such as Software, Telecom, Datacom and Infrastructure and a robust institutional sales and trading platform.

As a result of the combination, issuers will enjoy a stronger platform from which to meet their capital raising needs, with a deeper bench of professionals and a broader set of distribution capabilities. Individual investors will enjoy access to a significantly increased number of shares from a broader selection of companies, and a more comprehensive body of easily accessible online equity research.

"This transaction represents a major milestone in the ongoing evolution of Wit Capital, and it results in a number of important benefits that will enable the company to fulfill our long-standing mission: to empower investors and issuers alike by transforming the capital raising process through the use of the Internet. It's a win-win situation -- both groups benefit -- issuers have expanded services and distribution channels and individual investors have access to more shares and more quality research," said Ron Readmond, Wit Capital's Co-CEO. "More than that, though, we truly believe this merger will propel our model of Internet-based capital formation to a new level."

The combination results in key competitive advantages for Wit Capital and significant benefits to investors and issuers. Upon completion of the transaction:

  • Combined 9-month revenues total over $125 million -- Investment banking and equity research resources will more than double to over 100 professionals
  • Number of companies covered by research will more than quadruple to over 200
  • Total shares offered to investors could more than triple in the first year following the transaction
  • Strategic advisory and market making capabilities will be greatly enhanced
  • Wit Capital will have a strengthened ability to demand an increasing proportion of deal economics and share retention

Freeman and Associates acted as exclusive strategic and financial advisor to SoundView.