Industry Updates

Wells Fargo to acquire Merlin Securities

Friday, April 27, 2012

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Opalesque Industry Update: Wells Fargo Securities, the capital markets and investment banking business of Wells Fargo & Company, today announced that a definitive agreement has been reached to acquire Merlin Securities, LLC, a San Francisco and NYC-based prime brokerage services and technology provider. Terms of the agreement were not disclosed.

Merlin offers an industry leading suite of integrated solutions with its MerlinPrime and MerlinSHARP products and provides open architecture technology, custody and clearing services, operational support, and securities trading to clients in the asset management industry.

“Merlin’s capabilities fill an important niche in Wells Fargo Securities’ product set and connect many activities where we already have expertise, including technology, custody, clearing, collateral management and execution,” said John Shrewsberry, head of Wells Fargo Securities. “This is a logical extension of our offering to the investment industry, which is increasingly focused on tools to enhance risk management and improve capital efficiency. In addition, it provides new cross-sell opportunities for existing customers of both Wells Fargo and Merlin. This transaction enhances our ability to meet customer needs and generate earnings for our shareholders, all while adhering to our disciplines of prudent risk management and controlled growth.”

As part of the transaction, Merlin’s team members will join Wells Fargo Securities. Managing partners Stephan Vermut and Aaron Vermut will continue to lead the Prime Services Offering. Merlin and Wells Fargo Securities will work closely with existing clients to continue to provide uninterrupted service and focus on clients’ ongoing needs.

“Wells Fargo is the perfect partner for Merlin and its clients,” said Merlin’s Stephan Vermut. “Together, our clients will have access to a greater range of products and financial resources that will augment the open architecture solutions that Merlin currently provides. This combination will enable us to expand our client base to a broader set of asset managers looking for the safest custodians and the best products available.”

“With the acquisition of Merlin, we are gaining highly scalable, broker neutral technology with multi-asset and multi-custodian capabilities,” said Chris Bartlett, head of Equity Sales and Trading at Wells Fargo Securities. “Merlin’s open architecture platform enables clients to choose the custodian and trading platform that is right for their business. Their team members have extensive experience in this industry and we look forward to adding their expertise to our platform.”

The transaction, subject to regulatory approvals and other customary closing conditions, is expected to close during the third quarter of 2012. Greenhill & Co. served as financial advisor and Arnold & Porter served as counsel to Merlin. Wells Fargo Securities served as its own financial advisor with Morgan Lewis as counsel.

Wells Fargo

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