Planning industry elder statesman Harold Evensky and his team at Evensky & Katz have merged with a firm founded by a former client and employee to form a firm with $1.9 billion in assets under management.
"It was a mind-boggling experience," Evensky says, adding that complex negotiations wrapped up at about 1 a.m. on Tuesday morning.
The deal combines Evensky & Katz, with offices in Coral Gables, Fla., and Lubbock, Texas, with Foldes Financial Management, a Miami firm founded by Steven Foldes. The merger forms what Evensky says will be one of the largest independent planning firms in South Florida; the new firm will be based in Miami and go by the moniker E&K-FFM.
The deal also strengthens the succession plans for the firm founders. Fiduciary Network helped fund the transaction, providing liquidity for younger members of both firms to buy shares from their founders and senior executives. Fiduciary Network CEO Mark Hurley declined to specify how much money was involved in the deal.
"Steve worked for Harold for a few years [in the 1990s], then he decided to go out on his own. Now the cycle has sort of completed itself," says Fiduciary Network CEO Mark Hurley. "Steve's incredible at bringing clients in and Evensky has a boatload of very young owners."
4 YEARS OF NEGOTIATIONS
The deal took four years to put together, from the first informal conversations to the complicated final negotiations, Hurley says.
But despite the transactional complexity, the two firms are a good fit -- in part because Foldes started his career with Evensky, Hurley and Evensky say. Foldes "was a natural [for a deal] because his business and practice have so many extraordinary similarities to my firm," Evensky says.
Foldes began his career as a footwear entrepreneur, launching a trend for all-plastic "jellies" sandals, like the ones worn by actor Jeff Bridges in The Big Lebowski. After selling the firm, Foldes became a client of Evensky's firm.
"He was fascinated by what we were doing -- the whole process of financial planning, the whole concept," says Evensky, whose firm's average client has $5 million in assets.
Eventually, Evensky offered Foldes a job; Foldes worked for the firm for five years in the early 1990s before striking out on his own. Now, Foldes brings about $600 million to the newly merged firms, Hurley says.
Evensky will continue as chairman of the merged firm; his wife and business partner, Deena Katz, will continue as a consultant to the firm, though she works full-time as a professor in the planning department at Texas Tech University, Evensky says.
"Obviously, I'm pleased with the result," Evensky says. "Quite a few of the practices in Florida started with us. We helped seed a good part of the community with financial planners."
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