Carlyle-Led Consortium Buys Investment Bank

Yard Sale Sign

It's a buy.

Duff & Phelps, a leading independent financial advisory and investment banking firm, has announced that it has entered into a definitive merger agreement under which a consortium comprising controlled affiliates of or funds managed by The Carlyle Group, Stone Point Capital, Pictet & Cie and Edmond de Rothschild Group will acquire the Company for $15.55 per share in cash in a transaction valued at approximately $665.5m.

The transaction is expected to close in the first half of 2013, subject to customary closing conditions - including the receipt of stockholder and regulatory approvals.

Noah Gottdiener, CEO of Duff & Phelps, said, 'Duff & Phelps Board of Directors, acting on advice from the Company’s legal and financial advisors, agrees that this transaction is in the best interest of our stockholders, who will receive an immediate and certain cash premium for their shares. Importantly, the transaction will be structured to preserve the firm’s independence as we serve our clients in the future'.

Olivier Sarkozy, Managing Director and head of Carlyle’s Global Financial Services group, said, 'Regulatory demands, implementation of new accounting policies and requirements for increased corporate disclosure and third party validation provide significant growth opportunities for Duff & Phelps core products and services. We will harness Carlyle’s and Stone Point’s global networks while leveraging Duff & Phelps preeminent brand to foster growth in new geographies. Additionally, we believe the involvement of Pictet and Edmond de Rothschild Group will support the Company’s initiatives to enhance its international presence and expand its Limited Partner client base. We are excited to work with Noah and his management team on this opportunity'.

Charles A. Davis, CEO of Stone Point Capital, added, 'Noah and his colleagues have performed admirably throughout market cycles and have done a superb job executing their business plan to grow the Company. Today, Duff & Phelps is well-positioned in the marketplace, and we believe that demand for the Company’s independence, integrity and professionalism will only increase in the current environment'.

The merger agreement provides for a 'go-shop' period commencing immediately and ending on February 8, 2013, during which the Company, with the assistance of its financial and legal advisors, will actively solicit and potentially receive, evaluate and enter into negotiations with third parties that offer alternative transaction proposals. It is not anticipated that any developments will be disclosed with regard to this process, unless the Duff & Phelps board makes a decision with respect to a potential superior proposal. There is no guarantee that this process will result in a superior proposal. The merger agreement provides for a break-up fee of approximately $6.65 million if the Company terminates the agreement prior to March 8, 2013, in connection with a superior proposal that first arose during the go-shop period.

All members of the senior management team have agreed to remain employed by, and invest in the equity of, the Company following the closing of the transaction. They have agreed to offer to participate on similar terms in any other acquisition proposal that may be made for the Company.

The pro forma Board of Directors will comprise nine members – including two representatives each from the management team, The Carlyle Group and Stone Point Capital, in addition to three independent directors. No single member of the Consortium will own more than 35% of the pro forma Company.

The transaction has been approved by the Board of Directors of Duff & Phelps, following the recommendation of a transaction committee consisting of independent directors. The Board of Directors of Duff & Phelps recommends that stockholders vote in favor of the transaction at the special meeting of stockholders that will be called to approve the transaction. Stockholders beneficially owning an aggregate of approximately 10% of the outstanding shares of the Company have already agreed to vote their shares in favor of the transaction; these commitments terminate if the merger agreement is terminated.

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