SVB buys Leerink for $280M, boosting its life sciences business

There’s a lot of talk at the moment about the emerging overlap between the tech and life sciences sectors, and now there’s a big player with extensive expertise in both areas.

Silicon Valley Bank parent SVB is buying prominent life sciences investor Leerink Partners for $280 million to create SVB Leerink, a company that SVB’s CEO Greg Becker said will deliver "a complete capital markets offering."

That includes "debt, convertible debt and equity financing as well as advisory services—including mergers & acquisitions—for private and public healthcare and life science companies," he added.

SVB is already active in both tech and life sciences; its clients include around half the venture capital backed companies in these sectors in the U.S., but adding Leerink will give it a big gain in life sciences, particularly in research and advisory expertise. It will also add prominent experts such as Geoffrey Porges, Andrew Berens and Joseph Schwartz.

The deal includes a $60 million fund to retain employees after the acquisition goes through that will be paid out over the following five years, and SVB said "key employees" have already signed employment and retention agreements.

Adding Leerink will diversify SVB’s revenue streams and boost noninterest income, according to SVB. In the 12 months to end-September, Leerink’s noninterest income was $263 million, while SVB booked $711 million, with the bulk of its income (more than $1.7 billion) coming from net interest. They don’t envisage any cost savings from the merger.

The deal is expected to close early next year, after which SVB Leerink will act as a wholly owned subsidiary of SVB and the leadership team will remain in place, with Leerink CEO Jeff Leerink taking the same role.

"This merger represents an important step forward for our firm as we continue to strive to be an indispensable company-building partner to our expanding global client base," said Leerink.

"SVB and Leerink share a strong client-focused culture, uniquely aligned on building long-term client relationships."