-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, B/NCf0Zwr7nIH9qmwnq6uTpfqbN0IUV/rc1gfzMMUeVkbO1W6UkWrCTYMitNoLtT TwvYgK/Nw64UasZfdKQs6Q== 0000009626-03-000002.txt : 20030114 0000009626-03-000002.hdr.sgml : 20030114 20030108101638 ACCESSION NUMBER: 0000009626-03-000002 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20021231 ITEM INFORMATION: Other events ITEM INFORMATION: FILED AS OF DATE: 20030108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: BANK OF NEW YORK CO INC CENTRAL INDEX KEY: 0000009626 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 132614959 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06152 FILM NUMBER: 03507165 BUSINESS ADDRESS: STREET 1: ONE WALL ST 10TH FL CITY: NEW YORK STATE: NY ZIP: 10286 BUSINESS PHONE: 212-495-1784 MAIL ADDRESS: STREET 1: ONE WALL STREET 31ST FLOOR CITY: NEW YORK STATE: NY ZIP: 10286 8-K 1 r8kcsfb.txt 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8 - K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 8, 2003 THE BANK OF NEW YORK COMPANY, INC. ---------------------------------- (exact name of registrant as specified in its charter) NEW YORK -------- (State or other jurisdiction of incorporation) 001-06152 13-2614959 --------- ---------- (Commission file number) (I.R.S. employer identification number) One Wall Street, New York, NY 10286 ----------------------------- ----- (Address of principal executive offices) (Zip code) 212-495-1784 ------------ (Registrant's telephone number, including area code) 2 ITEM 5. Other Events ------------ On January 8, 2003, The Bank of New York Company, Inc. issued a press release announcing the acquisition of Pershing unit of Credit Suisse First Boston. Exhibit 99 is a copy of such press release and is incorporated herein by reference. ITEM 9. Regulation FD Disclosure ------------------------- On January 8, 2003, The Bank of New York Company, Inc. webcast a presentation discussing the details of the acquisition of Pershing unit of Credit Suisse First Boston, the slides from which are filed herewith as Exhibit 99.1. 3 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Dated: January 8, 2003 THE BANK OF NEW YORK COMPANY, INC. (Registrant) By: /s/ Thomas J. Mastro ------------------------- Name: Thomas J. Mastro Title: Comptroller 4 EXHIBIT INDEX ------------- Exhibit No. Description - ----------- ----------- 99 Announcement of the acquisition of Pershing unit of Credit Suisse First Boston contained in the press release dated January 8, 2003, of The Bank of New York Company, Inc. 99.1 Slides from webcast presentation discussing the details of the acquisition of Pershing unit of Credit Suisse First Boston presented on January 8, 2003. EX-99 3 ex99csfb.txt EX-99 1 EXHIBIT 99 The Bank of New York Company, Inc. NEWS - ----------------------------------------------------------------------------- One Wall Street, New York, NY 10286 ----------------------------------- Contact: PUBLIC AND INVESTOR RELATIONS IMMEDIATELY - ----------- Media: Investors: - ----- --------- Robert T. Grieves, SVP John M. Roy, MD (212) 635-1590 (212) 635-8005 Cary J. Giacalone, VP Gregg A. Scheuing, VP (212) 635-1590 (212) 635-1578 THE BANK OF NEW YORK COMPANY, INC. SIGNS DEFINITIVE AGREEMENT TO ACQUIRE PERSHING FROM CREDIT SUISSE FIRST BOSTON The Bank of New York to become the largest correspondent clearing firm Solidifies Bank's position as the leading securities services outsourcer to financial institutions NEW YORK, N.Y., January 8, 2003 - The Bank of New York Company, Inc., a leading global provider of securities services, announced today that it has entered into a definitive purchase agreement with Credit Suisse First Boston to acquire its Pershing unit. Pershing is the largest global provider of correspondent clearing services and outsourcing solutions for brokers, asset managers and other financial intermediaries. Under the terms of the agreement, The Bank of New York Company, Inc. will pay a purchase price of $2 billion in cash, representing a premium of $1.4 billion over book value. The amount may be adjusted higher by up to $50 million based on the level of Pershing's 2003 revenue growth. The purchase price will be financed from the public issuance of debt and equity, currently estimated to be approximately $900 million and $1.1 billion, respectively. 2 The transaction is expected to close by the end of the second quarter of 2003. Excluding one-time integration charges of $0.06 per share, the transaction is expected to be dilutive to earnings by $0.02 to $0.03 per share in 2003. In 2004, the first full calendar year after the close, the transaction is expected to be accretive to the Company's earnings by $0.02 to $0.03 per share, including $115 million of projected pre-tax cost savings and incremental revenue related opportunities. The transaction has been approved by each company's board of directors and is subject to customary regulatory approvals. With over 60 years of experience, Pershing is a premier correspondent clearing firm, providing financial services outsourcing solutions, investment-related products and services, and financial product distribution. Headquartered in Jersey City, New Jersey, the company has approximately 4,000 employees worldwide at 13 locations in the U.S., Europe and Asia. Pershing has a client base of more than 850 broker-dealers and investment managers and supports approximately 100,000 investment professionals at these firms. This client base represents more than 5 million customer accounts. Pershing holds approximately $400 billion of total customer assets, including $160 billion of money market and mutual fund assets. In addition to its preeminent position in the United States, Pershing is one of the most prominent clearing firms in Europe. It is also a recognized leader in financial product distribution and web-technology solutions for the financial community. Thomas A. Renyi, chairman and chief executive officer of The Bank of New York Company, Inc., said, "Strategically, Pershing is an exceptional fit for The Bank of New York's global franchise. Not only does it augment our fastest growing business segment, but it also builds upon our three core strengths - innovative product capabilities, a well-diversified global client base, and extensive product distribution network. This strengthens our 3 position as the premier global securities services provider and accelerates the continuing transformation of our business model." John Mack, Credit Suisse First Boston's Chief Executive Officer and co- CEO of Credit Suisse Group, said, "We are pleased to have reached this agreement with The Bank of New York. Pershing is a strong company with a solid reputation in the correspondent clearing marketplace, and The Bank of New York has a global leadership position in securities servicing. We believe both companies and our customers, including those of CSFB Private Client Services, will greatly benefit from this transaction." Richard F. Brueckner, chief executive officer of Pershing, said, "We are excited that our clients and management team will have the opportunity to join The Bank of New York, whose commitment to this segment of the market is recognized around the globe. Pershing's clients will benefit from the Bank's wide range of product offerings and its commitment to meeting their needs." Joseph M. Velli, senior executive vice president and head of BNY Securities Group, said, "We are pleased that Pershing will become a part of the Bank's BNY Securities Group. This acquisition shows our commitment to the industry and to our clients, and it underscores our resolve to be the premier provider of correspondent clearing services, particularly as our industry undergoes rapid change. It further demonstrates the Bank's intent to continually reinvest in this business, to evolve as the market evolves, and to provide our clients with a full array of sophisticated product and service solutions, making us a one-stop source for our clients' complex financial needs." The Bank of New York will webcast a presentation and hold a conference call discussing the details of this planned acquisition on Wednesday, January 8, 2003, at 9:00 am ET. The presentation will be accessible from the Company's website at www.bankofny.com/jan03 and also by telephone at (888) 790-0319 within the United States or (610) 769-3531 internationally. 4 The passcode is "The Bank of New York." A recorded replay of the presentation will also be available on the Company's website and by telephone at (800) 834-5819 within the United States or (402) 280-1651 internationally after the presentation's conclusion. BNY Securities Group comprises BNY Brokerage Inc.; BNY Clearing Services LLC and BNY Direct Execution Inc., a subsidiary of BNY Brokerage Inc., each company a member NYSE/SIPC; B-Trade Services LLC and Westminster Research Associates, Inc., each company a member NASD/SIPC; G-Trade Services Limited, member of the Bermuda Stock Exchange; and BNY Jaywalk, Inc. The Bank of New York Company, Inc. (NYSE: BK) is a financial holding company with total assets of over $80 billion as of September 30, 2002. The Company provides a complete range of banking and other financial services to corporations and individuals worldwide through its basic businesses, namely, Securities Servicing and Global Payment Services, Corporate Banking, BNY Asset Management and Private Client Services, Retail Banking, and Global Market Services. Additional information on the Company is available at www.bankofny.com. EX-99.1 CHARTER 4 slides.txt EX-99.1 EXHIBIT 99.1 ==================================(SLIDE 1)=================================== The Bank of New York Acquisition of Pershing January 8, 2003 ==================================(SLIDE 2)=================================== Cautionary Language The forward looking statements presented today including, among other things, projections with respect to revenue and earnings and the Company's financial condition, plans and objectives are subject to risks and uncertainties that could cause actual results to differ materially from the projections. These include lower than expected performance or higher than expected costs in connection with acquisitions and integration of acquired businesses, the level of capital market activity, inaccuracies in management projections or market forecasts, the actions that management could take in response to these changes and other factors described in the SEC filings referred to below. For additional detailed information, we refer you to the discussions under the heading "Forward Looking Statements" in the Company's 2001 10-K and our most recent 10-Q filed with the SEC. The forward looking statements speak only as of January 8, 2003. We will not update forward looking statements to reflect facts, assumptions, circumstances, or events which have changed after they were made. ==================================(SLIDE 3)=================================== Transaction Summary - - Acquisition of Pershing unit of Credit Suisse First Boston - - Cash purchase price of $2.0 billion - $1.4 billion premium to book value - Earn-out potential of $50 million - - To be financed through public issuance of debt and common stock - - Accretive to GAAP EPS in 2004 with an IRR well in excess of cost of capital - - Expected closing 2Q of 2003 ==================================(SLIDE 4)================================== Pershing Franchise - - Premier brand with more than 60-year history - - World's largest correspondent clearing firm - - Leading provider of financial services outsourcing solutions - - Powerful product distribution network - - Diversified revenue base - - Industry leading technology - - Respected and experienced management team ==================================(SLIDE 5)================================== Strategic Benefits - - Accelerates transformation of the BNY business model - Fee-based revenues increase to approximately 74% in '03 on a pro forma basis - - BNY becomes largest provider of agency execution and clearing services - - Broadens global product distribution network - - Significant scale benefits through cost savings and new revenue opportunities - - Enhances long-term growth rate An exceptional fit for BNY ==================================(SLIDE 6)================================== Long-Term Growth Rates - - Represents substantial investment in BNY's fastest growing business segment Long-Term Business Core Growth* -------- ------------ Issuer Services 13% Investor Services 10% Broker-dealer Services 13% Execution and Clearing 14% Overall 12.5%+ * Figures from 12/18/02 analyst presentation ==================================(SLIDE 7)================================== Three Pillars of the BNY Franchise - - Leading product capabilities - - Extensive global client base - - Valuable product distribution network Pershing strengthens each of these pillars ==================================(SLIDE 8)================================== Pershing Offers Leading Product Capabilities - - Clearance & settlement - - Asset gathering products & services - - Custody & related services - - Product & services development/delivery - - Financing & cash management - - Order routing - - Technology services Substantial cross-sell opportunities ==================================(SLIDE 9)================================== Pershing has a Large, Diversified Client Base % of Client Assets ----------------------------- IFAs and RIAs 31% Full Service Firms 22% Banks 15% Investment Companies 11% International 8% Online Discount 7% Institutional 6% ---- Total 100% ===== - - Approximately $400 billion of client assets Note: As of September 30, 2002 ==================================(SLIDE 10)================================== Pershing has a Powerful Distribution Network - - Largest network of introducing brokers - 793 introducing brokers/RIAs in the U.S. - 66 introducing brokers in the U.K. - - Relationships with the largest institutional and mutual fund investment managers - Estimated 100,000 investment professionals - Over 5 million end clients - - Infrastructure for managed account asset gathering ==================================(SLIDE 11)================================== Pershing has the Leading U.S. Market Share Firm # of Correspondents - U.S. - ---- --------------------------- Pershing 793* Fiserv/Investec 600 U.S. Clearing 400 Bear Stearns 380 BNY Clearing 285 SWS Securities 200 Spear Leeds 200 RBC Dain 175 Fidelity 164 Corresp. Services 140 Source: Clearing Quarterly & Directory, December 2001 edition. Reflects companies responding to survey. * Pershing 9/30/2002 Customer List. ==================================(SLIDE 12)================================== Pershing's Worldwide Resources - - United States - 10 locations nationwide - Approximately 2,700 employees - - Europe - Locations in London and Dublin - Approximately 600 employees - - India - Technology development center - Approximately 650 employees ==================================(SLIDE 13)================================== Solidifies BNY's Leadership Position - - BNY Securities Group becomes the market leader in agency execution and clearing services - - Agency execution services: - Over 3,000 institutional clients - Over 325 million shares executed daily - 29 NYSE seats - Largest electronic broker for global execution - Largest provider of commission management services - - Clearing services: - Over 1,200 correspondent brokerage firms - Servicing over 100,000 investment professionals - Over 500,000 trades cleared daily - - Serving clients in over 65 global markets ==================================(SLIDE 14)================================== Attractive Growth Prospects - - Increasing market share in U.S. and Europe - Continued consolidation among clearing firms - Focusing on self clearing firms - Increasing share with RIAs and institutional market - Expanding in Ireland & Europe - - Expanding product offerings - Mutual funds, annuities and insurance products - Fee-based brokerage accounts - Managed accounts - - Increasing productivity and profitability - Capturing incremental order flow - Reengineering for STP ==================================(SLIDE 15)================================== Transaction Terms - - Cash purchase price of $2.0 billion at closing - $1.4 billion premium to book value - Earn-out of up to $50 million tied to `03 revenue growth - - Both Boards of Directors have approved the transaction - - Requires regulatory clearance from banking, securities and anti-trust agencies - - Expected closing 2Q of 2003 ==================================(SLIDE 16)================================== Transaction Financing - - Purchase price of $2.0 billion financed from: - $0.9 billion from public issuance of debt and general corporate resources - $1.1 billion issuance of common equity - Timing, amount and mix may be adjusted based on market conditions - - Model assumes issuance of 40-45 million shares ==================================(SLIDE 17)================================== Financial Metrics - - Adds annual revenues of approximately $875 million - - Balance sheet is expected to increase by approximately $9 billion at closing - - IRR projected to be approximately 20% ==================================(SLIDE 18)================================== EPS Impact - - One-time integration charge of $0.06 per share in 2003 - - Projected earnings impact: - 2003: dilutive by approximately $0.02 - $0.03 per share excluding one- time integration costs - 2004: accretive by $0.02 - $0.03 per share - - Achievement of $50 million earn-out payment will result in incremental accretion ==================================(SLIDE 19)================================== Synergies - - Projected aggregate pre-tax income synergies*: - 2003: $22 million - 2004: $115 million - Expense reductions: $85 million - Revenue-related: $30 million - - 2005 and beyond: $150+ million per annum * Assumes June 30, 2003 closing ==================================(SLIDE 20)================================== Capital Ratios Remain Strong - - Projected capital ratios: 12/31/02E Closing 12/31/03 6/30/04 --------- ------- -------- ------- Tier 1 7.61% 6.95% 7.50% 7.75% Total 11.94% 11.05% 11.20% 11.75% Tangible common equity 5.27% 4.65% 5.05% 5.25% - - Stock repurchases deferred while capital ratios return to targeted levels ==================================(SLIDE 21)================================== Integration Plan - - Retention of Pershing management team and technology platform will minimize any disruptions - - BNY Clearing clients will migrate onto Pershing platform - - Rationalize headcount and eliminate redundant technology spending - - Integration will be substantially complete within 12 months of closing ==================================(SLIDE 22)================================== Summary - - Acquiring a premier franchise - - Strategy complements BNY's global franchise and core businesses - - Minimal integration risk - - Substantially increases presence in our fastest growing business segment - - Financially attractive to both EPS and IRR - - Further enhances BNY's role as the infrastructure for the global capital markets ==================================(SLIDE 23)================================== THE BANK OF NEW YORK =====================================(END)==================================== -----END PRIVACY-ENHANCED MESSAGE-----