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JWGENESIS FINANCIAL CORP.
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(BW)(FL-JWGENESIS/FIRST-UNION)(JWG)(FTU) First Union Corporation and JWGenesis
Financial Corp. Sign Definitive Acquisition Agreement
Business Editors
RICHMOND, Va.--(BUSINESS WIRE)--Sept. 1, 2000--First Union Corporation
(NYSE:FTU) and JWGenesis Financial Corp. (AMEX:JWG) announced today the signing
of a definitive agreement under which First Union will acquire JWGenesis, a
publicly traded company whose broker dealer subsidiaries provide securities
brokerage and investment services to clients nationwide. JWGenesis is based in
Boca Raton, Florida and has approximately 500 registered representatives,
including a significant presence in the independent brokerage business through
its offices in 34 states.
Under terms of the transaction, First Union will pay in cash between $10
and $12 per JWGenesis share, equating to approximately $90 million to $110
million, to acquire the firm, depending on the level of broker production
retained. The acquisition is subject to approval of JWGenesis shareholders, and
the satisfaction of regulatory and other closing conditions. First Union said
that upon completion of the transaction, expected in January 2001, JWGenesis
would be operated within its First Union Securities Brokerage Group as a
separate NASD-member broker-dealer.
JWGenesis also announced that before being acquired by First Union, it
intends to distribute to its shareholders its ownership interest MVP.com, Inc.,
the Internet's premier online source for outdoor and sporting goods merchandise
and insight. This distribution is expected to result in taxable income to the
JWGenesis shareholders of approximately $0.67 per share. The record date for
distribution is currently scheduled for late September and the payment date for
late October, subject to regulatory requirements. While JWGenesis expects to
distribute the majority of its interest in MVP.com, up to 30% may be retained
and used for corporate purposes, including for issuance to holders of JWGenesis
options and warrants.
The acquisition of JWGenesis provides First Union Securities with a
foothold in the independent brokerage field, complementing the firm's existing
service channels which include 365 full service brokerage offices in 43 states,
2400 branches of First Union National Bank and the Internet. The transaction
positions First Union Securities to participate in one of the financial services
industry's fastest growing fields, said Daniel J. Ludeman, president and chief
executive officer of First Union Securities Brokerage Group. He noted that over
the last six years, the number of independent representatives has been rising at
nearly twice the rate of those associated with large wirehouses.
"The acquisition of JWGenesis reflects our determination and capacity to
offer financial advisors a variety of ways to work with or for First Union
Securities so they can select the one best suited to their needs," Mr. Ludeman
said. Unlike brokers affiliated with other First Union Securities units,
independent representatives are self-employed and bear the cost of operating an
independent business, Mr. Ludeman explained. "For these brokers, affiliation
with us will provide the benefit of First Union Securities' national scope, name
recognition and product capabilities as they continue to enjoy the autonomy and
self-sufficiency they prefer."
On a fully diluted earnings per share basis, the transaction is expected to
be approximately break even in 2001 and accretive thereafter to First Union
shareholders. In line with First Union Corporation's June 26, 2000 announcement
of a strategic realignment, this acquisition supports the growth of First
Union's retail brokerage arm, part of the Capital Management Group, which has
been identified as a core business line for First Union. The Capital Management
Group comprises a number of business lines focused on asset management and
investment services. Along with retail brokerage, these include mutual funds,
insurance, annuities, retirement and estate planning and personal trust services
as well as 401(k) and institutional advisory services.
Marshall T. Leeds, Chairman and Chief Executive Officer of JWGenesis,
stated: "We are excited and pleased with the opportunity to become part of the
First Union family. For our shareholders, employees, financial advisors and
clients, this is a historic opportunity. The resources of First Union, the
variety of products and services they offer and their commitment to the highest
standards of quality and service will elevate us to a level far above that of
our competitors. We believe that this transaction, combined with our proposed
dividend of our interest in MVP.com, greatly serves the best interest of our
shareholders."
<PAGE>
JWGenesis expects the distribution to be in the form of membership
interests in a special purpose limited liability company being formed to hold
the MVP.com stock. These interests would not be listed for trading on any
exchange or Nasdaq, and there will be other significant restrictions on their
transferability. If MVP.com, Inc. engaged in a public offering, or otherwise
approved a liquidating distribution by the LLC, the shares of MVP.com stock
would be distributed directly to the holders of the LLC membership interests, or
the shares would be sold and the resulting net proceeds so distributed.
JWGenesis Financial Corp. provides a wide range of financial services to
individuals, businesses and other brokerage firms through its wholly owned
subsidiaries: JWGenesis Capital Markets, Inc., JWGenesis Securities, Inc.,
JWGenesis Financial Group, Inc. and JWGenesis Financial Services, Inc.
The nation's 6th largest brokerage group, First Union Securities provides
brokerage, asset management and capital markets services to individuals,
institutions and corporations through nearly 7,000 registered representatives in
more than 2,700 offices nationwide. First Union Securities is a trade name that
includes the following two separate and distinct registered broker-dealers
within First Union Corporation: First Union Securities, Inc., member
NYSE/NASD/SIPC and First Union Brokerage Services, member NASD/SIPC.
Capital Management Group (CMG) includes First Union's asset management and
investment services, providing a full array of unique, integrated financial
products and services to individual and institutional investors. CMG businesses
include the sixth largest broker-dealer, largest bank annuity provider, fourth
largest discretionary personal trust asset manager, and a top twenty mutual fund
company. First Union Corporation (NYSE:FTU) is a leading provider of financial
services to 15 million retail and corporate customers with $258 billion in
assets and stockholders' equity of $14 billion at June 30, 2000.
Certain statements in this release regarding the expected future business
and prospects of First Union Corporation and JWGenesis Financial Corp.
constitute "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such forward-looking statements are
based upon current expectations and involve certain risks and uncertainties that
could cause actual results to differ materially from any such statement,
including risks and uncertainties discussed in the 1999 Annual Report on Form
10-K of the companies.
CONTACT: First Union Securities, Richmond
Tony Mattera, 804/787-6872
or
JWGenesis Financial Corp., Boca Raton, Fla.
Margo Vuicich, 561/338-2721
KEYWORD: VIRGINIA FLORIDA
INDUSTRY KEYWORD: BANKING MERGERS/ACQ
