UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

SCHEDULE 14A

 

PROXY STATEMENT PURSUANT TO SECTION 14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

(Rule 14a-101)

 

Filed by the Registrant þ

 

Filed by a Party other than the Registrant o

 

Check the appropriate box:

 

o  Preliminary Proxy Statement

o  Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

þ  Definitive Proxy Statement

o  Definitive Additional Materials

o  Soliciting Material Pursuant to Rule 240.14a-12

 

THOMAS WEISEL PARTNERS GROUP, INC.

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

 

Payment of Filing Fee (Check the appropriate box):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One Montgomery Street

San Francisco, California 94104

 

November 7, 2007

 

Dear Shareholder:

 

After careful consideration, the board of directors of Thomas Weisel Partners Group, Inc. has unanimously approved the acquisition by Thomas Weisel Partners Group, Inc. of Westwind Capital Corporation. If the transaction is completed, Westwind Capital Corporation common shares and Class A common shares will be acquired in exchange for an aggregate of $45,000,000 in cash and 7,009,112 shares of Thomas Weisel Partners common stock (including shares of a Canadian subsidiary of Thomas Weisel Partners that are exchangeable for shares of Thomas Weisel Partners common stock).

 

You are cordially invited to attend a Special Meeting of Shareholders of Thomas Weisel Partners Group, Inc., which will be held on December 14, 2007 at 8:00 a.m., Pacific time. The meeting will take place at our corporate headquarters at One Montgomery Street, 35th Floor, San Francisco, California 94104. At the meeting, we will vote upon the issuance of shares of Thomas Weisel Partners common stock in connection with the transaction.

 

All holders of Thomas Weisel Partners common stock as of November 6, 2007 will be entitled to vote at the special meeting. Your vote is very important to us and your shares should be represented and voted, whether or not you plan to personally attend the special meeting.

 

Sincerely,

 

Thomas W. Weisel

Chairman and Chief Executive Officer

 

 

 

 

One Montgomery Street

San Francisco, California 94104

 

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

 

 

By Order of the Board of Directors,

 

 

Mark P. Fisher

Secretary

 

November 7, 2007

 

One Montgomery Street

San Francisco, California 94104

 

 

PROXY STATEMENT

 

 

SPECIAL MEETING OF SHAREHOLDERS

 

November 7, 2007

 

 

This proxy statement is furnished in connection with the solicitation of proxies by the Board of Directors of Thomas Weisel Partners Group, Inc., a Delaware corporation (which we refer to as “Thomas Weisel Partners”, the “firm”, “we”, “our” or “us” and when so referring include, as applicable, our predecessor limited liability company), to be used at our special meeting of shareholders to be held on Friday, December 14, 2007, at 8:00 a.m., Pacific time, and at any adjournments or postponements of the special meeting. This proxy statement and the accompanying form of proxy is first being mailed to shareholders of Thomas Weisel Partners on or about November 9, 2007 and is dated November 7, 2007. You should not assume that the information contained in this proxy statement is accurate as of any date other than that date, and the mailing of this proxy statement to you does not create any implication to the contrary.

 

The information concerning Thomas Weisel Partners contained or incorporated by reference in this proxy statement, including the attached annexes, has been provided by Thomas Weisel Partners. The information concerning Westwind Capital Corporation, or Westwind, contained in this proxy statement, including Annex D, has been provided to Thomas Weisel Partners by Westwind. The information concerning Thomas Weisel Partners after the completion of the combination of the two companies and the information used to derive the pro forma financial information has been provided by Thomas Weisel Partners, and is based in part on information provided to Thomas Weisel Partners by Westwind.

 

You should rely only on the information contained or incorporated by reference in this proxy statement to vote your securities at the special meeting. No person is authorized to give any information or to make any representation not contained in this proxy statement and, if given or made, that information or representation should not be relied upon as having been authorized.

TABLE OF CONTENTS

 

 

 

REPORTING CURRENCIES AND ACCOUNTING PRINCIPLES

 

The financial information regarding Westwind, including Westwind’s audited consolidated financial statements, Westwind’s unaudited consolidated financial statements and the summaries of those consolidated financial statements, contained in this proxy statement are reported in Canadian dollars, unless otherwise indicated, and have been prepared in accordance with Canadian generally accepted accounting principles, or Canadian GAAP, which (in the case of the consolidated financial statements of Westwind) conform in all material respects to U.S. generally accepted accounting principles, or U.S. GAAP. See Note 10 of the Westwind consolidated financial statements set forth in Annex D to this proxy statement.

 

The financial information regarding Thomas Weisel Partners, including Thomas Weisel Partners’ audited consolidated financial statements, Thomas Weisel Partners’ unaudited financial statements, the summaries of those financial statements and Thomas Weisel Partners’ pro forma financial statements, contained or incorporated by reference in this proxy statement are reported in U.S. dollars and have been prepared in accordance with U.S. GAAP.

 

EXCHANGE RATE INFORMATION

 

The following table sets forth exchange rate information expressed in terms of U.S. dollars per Canadian dollar at the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.

 

 

 

 

 

All dollar figures herein, other than financial information of Westwind, are in U.S. dollars unless otherwise indicated.

 

QUESTIONS AND ANSWERS ABOUT THE TRANSACTION AND THE SPECIAL MEETING

 

The following questions and answers are intended to address briefly some commonly asked questions regarding the transactions contemplated by the arrangement agreement and the special meeting. These questions and answers may not address all questions that may be important to you as a Thomas Weisel Partners shareholder. Please refer to the “Summary” beginning on page 4 and the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to in this proxy statement, which you should read carefully. See “Additional Information” beginning on page 84.

 

 

 

 

 

 

 

 

 

 

 

 

 

	•	the approval of the Thomas Weisel Partners share issuance by the requisite number of our shareholders;
	•	the approval of the Ontario Superior Court of Justice;
	•	the receipt of necessary regulatory approvals and consents;
	•	the absence of any law having been enacted or any litigation or proceeding having been brought by any governmental entity or, if reasonably likely to succeed, brought by any other party, that would prevent or prohibit the completion of the arrangement or the related transactions or would substantially deprive any party of the anticipated benefits of such transactions;
	•	Westwind’s, Thomas Weisel Partners’ and Canadian Sub’s respective representations and warranties in the arrangement agreement must be true and correct as of the date of the arrangement agreement and closing date in the manner described under “The Arrangement Agreement and Related Agreements — Conditions to the Arrangement”;
	•	each of Westwind, Thomas Weisel Partners and Canadian Sub must have performed in all material respects all obligations required to be performed by them under the arrangement agreement at or prior to the closing date; and
	•	no material adverse effect shall have occurred with respect to Westwind or Thomas Weisel Partners as described under “The Arrangement Agreement and Related Agreements — Conditions to the Arrangement”.

	•	a determination from the Minister responsible for implementing the Investment Canada Act that the acquisition of control of Westwind by Thomas Weisel Partners will be of net benefit to Canada; and
	•	approvals from the Investment Dealers Association of Canada, the Financial Industry Regulatory Authority, the United Kingdom Financial Services Authority, certain provincial securities commissions, the Toronto Stock Exchange, the Toronto Stock Exchange Venture Exchange and the New York Stock Exchange, among others.

	•	a shareholders’ equity agreement, whereby the Westwind shareholders will be restricted, subject to certain exceptions, from transferring the shares of Thomas Weisel Partners common stock and exchangeable shares they receive in connection with the arrangement until February 7, 2011, and will be subject to certain covenants relating to non-competition and non-solicitation of our employees and clients in the event they are no longer employed by us;
	•	a pledge agreement, whereby the Westwind shareholders will pledge to us certain shares of Thomas Weisel Partners common stock and/or exchangeable shares received by them in the transaction, as security for the liquidated damages provisions in the shareholders’ equity agreement as well as the shareholders’ indemnification obligations under the arrangement agreement; and
	•	an employment agreement with Lionel Conacher, who will become the President of Thomas Weisel Partners upon the closing of the transaction.

 

RISK FACTORS

 

You should carefully consider the following risk factors, which we believe are the significant risks related to the transaction, as well as the other information contained in this proxy statement, including the attached annexes, in evaluating whether to approve the Thomas Weisel Partners share issuance. These risks are not exhaustive. New risks may emerge from time to time and it is not possible for management to predict all risk factors, nor can we assess the impact of all factors on the transaction and our business following the transaction or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. For further discussion of risk factors relating to the business of Thomas Weisel Partners, please see the Risk Factors in our current filings with the SEC, including our Annual Report on Form 10-K for 2006 and our Quarterly Reports on Form 10-Q filed thereafter. See “Additional Information” beginning on page 84.

 

Thomas Weisel Partners and Westwind may experience difficulties, unexpected costs and delays in integrating their businesses, business models and cultures and the combined company may not realize synergies, efficiencies or cost savings from the transaction.

 

Thomas Weisel Partners and Westwind have operated and, until the transaction is completed, will continue to operate, independently. The success of the combined company following the completion of the transaction may depend in large part on the ability to integrate the two companies’ businesses, business models and cultures. In the process of integrating Thomas Weisel Partners and Westwind we may experience difficulties, unanticipated costs and delays. The challenges involved in the integration may include:

 

 

The integration of certain operations, in particular regarding the two companies’ research and brokerage businesses, following the transaction will take time and will require the dedication of significant management resources, which may temporarily distract management’s attention from the routine business of the combined company. The acquisition of Westwind represents our first significant acquisition as a public company. Employee uncertainty and lack of focus during the integration process may also disrupt the business of the combined company.

 

It is possible that the integration process could result in the loss of key employees, diversion of each company’s management’s attention, the disruption or interruption of, or the loss of momentum in, each company’s ongoing business or inconsistencies in standards, controls, procedures and policies, any of which could adversely affect our ability to maintain relationships with clients and employees or our ability to achieve the anticipated benefits of the transaction, or could reduce our earnings or otherwise adversely affect the business and financial results of the combined company. In addition, the integration process may strain the combined company’s financial and managerial controls and reporting systems and procedures. This may result in the diversion of management and financial resources from the combined company’s core business objectives.

 

Even if Thomas Weisel Partners and Westwind are able to integrate such businesses and operations successfully, there can be no assurance that this integration will result in any synergies, efficiencies or cost

savings or that any of these benefits will be achieved within a specific time frame. Any of these factors could adversely affect our business and results of operations.

 

If we are unable to integrate Westwind personnel successfully or retain key Thomas Weisel Partners or Westwind personnel after the transaction is completed, our business may suffer.

 

Our ability to obtain and successfully execute our business depends upon the personal reputation, judgment, business generation capabilities and project execution skills of our senior professionals. Any management disruption or difficulties in integrating Thomas Weisel Partners’ and Westwind’s professionals could result in a loss of clients and customers or revenues from clients and customers and could significantly affect our business and results of operations.

 

The success of the transaction will depend in part on our ability to retain personnel currently employed by Thomas Weisel Partners and Westwind. It is possible that these employees might decide not to remain with us while we work to complete the transaction or after the transaction is completed. If key employees terminate their employment, or insufficient numbers of employees are retained to maintain effective operations, the combined company’s business activities might be adversely affected, management’s attention might be diverted from successfully integrating Westwind’s operations to hiring suitable replacements, and the combined company’s business might suffer. In addition, we might not be able to locate suitable replacements for any key employees that leave our company or offer employment to potential replacements on reasonable terms.

 

Integration of Westwind’s operations with our operations may impair our ability to achieve the expected benefits of the transaction.

 

Following completion of the transaction, we expect to make changes to certain aspects of Westwind’s operations to integrate Westwind’s operations with those of Thomas Weisel Partners. For example, we expect that we will make changes to the way in which Westwind’s research professionals interact with its investment banking professionals to conform to Thomas Weisel Partners’ policies and procedures in this regard. In addition, we expect that Westwind’s combination with a larger firm could affect its existing client relationships or its ability to enter into new client relationships. Any changes that we make to Westwind’s operations, in addition to the fact that Westwind will be part of a larger organization, could disrupt Westwind’s business and client relationships and could substantially affect our ability to achieve the expected benefits of the transaction and our business and results of operations.

 

We could be subject to unknown liabilities of Westwind, which could cause us to incur substantial financial obligations and harm our business.

 

Although the Westwind shareholders will be required to indemnify us for certain breaches of representations and warranties made by Westwind in the arrangement agreement, the shareholders’ obligation is subject to monetary and time limitations, as described below in “The Arrangement Agreement and Related Agreements — Indemnification — Indemnification by Westwind Shareholders”. In addition, if we are entitled to indemnification by the Westwind shareholders, it may be costly to enforce those rights and/or we may not be successful in collecting amounts we are entitled to. If there are liabilities of Westwind of which we are not aware, we may have little or no recourse against the Westwind shareholders and may be obligated to bear the costs of those liabilities. In addition, many of the Westwind shareholders will continue as employees of the combined company following closing of the transaction. Accordingly, if an indemnifiable claim does arise, we may need to weigh the need to be indemnified for that claim against the potential employee distraction or damage to employee relations that may result if we were to seek recourse for that claim.

 

The transaction will reduce the voting power to current shareholders of Thomas Weisel Partners.

 

Following completion of the transaction, Westwind shareholders would hold or have the right to direct the voting of approximately 21.5% of the voting power of our outstanding shares, based on the number of our shares outstanding on November 6, 2007. As a result, our existing shareholders will not exert the same degree of voting

power with respect to the combined company that they did with Thomas Weisel Partners before the consummation of the acquisition transaction.

 

Following completion of the transaction we will be effectively controlled by our employees, whose interests may differ from those of other stockholders.

 

Following the completion of the transaction, our employees will collectively own approximately 44% of the total shares of common stock outstanding (including exchangeable shares), based on the number of our shares outstanding on November 6, 2007. Of these employees, Thomas W. Weisel will beneficially own approximately 7.4% of our common stock (including exchangeable shares) and Lionel Conacher will beneficially own approximately 4.6% of our common stock (including exchangeable shares). Mr. Weisel and Mr. Conacher, together with the next eight largest employee shareholders, are expected to collectively own approximately 22% of our common stock (including exchangeable shares).

 

As a result of these shareholdings, our employees will be effectively able to elect our entire board of directors, control our management and policies and, in general, determine without the consent of the other stockholders the outcome of any corporate transaction or other matter submitted to the stockholders for approval, including mergers, consolidations and the sale of all or substantially all of our assets. Our employees will effectively be able to prevent or cause a change in control of us. These actions may be taken even if other stockholders oppose them.

 

The transaction is subject to conditions to closing that could result in the transaction being delayed or not consummated, which could negatively impact our stock price and future business and operations. In order to obtain required regulatory approvals, we may become subject to conditions that we do not currently anticipate.

 

The transaction is subject to conditions to closing as set forth in the arrangement agreement, including obtaining the requisite Thomas Weisel Partners shareholder approval. If any of the conditions to the transaction are not satisfied or, where permissible, not waived, the transaction will not be consummated. Failure to consummate the transaction could negatively impact our stock price, future business and operations, and financial condition. Any delay in the consummation of the transaction or any uncertainty about the consummation of the transaction may adversely affect the future businesses, growth, revenue and results of operations of Thomas Weisel Partners or the combined company.

 

The transaction is subject to several U.S. and Canadian regulatory approvals, as well as other regulatory approvals. These regulatory approvals may not be received, or may be received later than anticipated. Regulatory approvals that are received may impose restrictions or conditions that restrict our activities or otherwise adversely affect our business and results of operations.

 

Following the acquisition of Westwind, we may become subject to additional risks relating to Westwind’s business.

 

Following the completion of the transaction, we will become subject to the risks relating to Westwind’s business. Because the risks and uncertainties facing us may differ from those facing Westwind, the market price, results of operations and financial condition of the combined company may be affected by risks and uncertainties different from those currently affecting us. These risks include the following:

 

of the Canadian economy. Following the completion of the transaction, we expect that a significant portion of the combined company’s business will be derived from Canadian-based clients. Accordingly, our business will be affected by changes in the Canadian economy and investment activity in Canada. To the extent that we experience a decline in business in Canada, due to unfavorable conditions in the Canadian economy or otherwise, we may not be able to offset these declines by increases in other aspects of our business and our financial results could suffer.

 

In the event the transaction is completed, we will incur significant additional expenses in connection with the integration of the two businesses.

 

In the event the transaction is completed, we expect to incur significant additional expenses in connection with the integration of the two businesses, including integrating personnel, geographically diverse operations, information technology systems, accounting systems, customers, and strategic partners of each company and implementing consistent standards, policies and procedures and may be subject to write-downs in assets.

 

The pro forma financial statements are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the transaction.

 

The pro forma financial statements contained in this proxy statement are presented for illustrative purposes only and may not be an indication of the combined company’s financial condition or results of operations following the transaction for several reasons. For example, the pro forma financial statements have been derived from the historical financial statements of Thomas Weisel Partners and Westwind and certain adjustments and assumptions have been made regarding the combined company after giving effect to the transaction. The information upon which these adjustments and assumptions have been made is preliminary, and these kinds of adjustments and assumptions are difficult to make with complete accuracy. Moreover, the pro forma financial statements do not reflect all costs that are expected to be incurred by the combined company in connection with the transaction. For example, the impact of any incremental costs incurred in integrating the two companies is not reflected in the pro forma financial statements. As a result, the actual financial condition and results of operations of the combined company following the transaction may not be consistent with, or evident from, these pro forma financial statements.

 

In addition, the assumptions used in preparing the pro forma financial information may not prove to be accurate, and other factors may affect the combined company’s financial condition or results of operations following the transaction. Any potential decline in the combined company’s financial condition or results of operations may cause significant variations in the stock price of the combined company. See the section entitled “Unaudited Pro Forma Financial Information” beginning on page 19.

 

Our international activities are subject to political, economic, legal, operational and other risks that are inherent in operating in a foreign country and the Westwind transaction will increase our level of activity outside of the United States.

 

In connection with our business activities in India, Europe and, following the completion of the transaction, Canada, we are subject to political, economic, legal, operational and other risks that are inherent in operating in a foreign country, including risks of possible nationalization, expropriation, price controls, capital controls, exchange controls and other restrictive governmental actions, as well as the outbreak of hostilities. In many countries, the laws and regulations applicable to the securities and financial services industries are uncertain and evolving, and it may be difficult for us to determine the exact requirements of local laws in every market. Our inability to remain in compliance with local laws in a particular foreign market could have a significant and negative effect not only on our businesses in that market but also on our reputation generally. We are also subject to the enhanced risk that transactions we structure might not be legally enforceable in the relevant jurisdictions. Westwind’s business is conducted and its revenues are substantially derived from activities outside of the United States. Accordingly, following the transaction, our exposure to risks relating to international operations will increase significantly.

The transaction will increase our exposure to foreign currency risk.

 

Following completion of the Westwind transaction we will hold assets, incur liabilities, earn revenues and pay expenses in Canadian dollars. Because our financial statements will continue to be presented in U.S. dollars, we will be required to translate assets, liabilities, income and expenses that relate to our Canadian operations and that are denominated in Canadian dollars into U.S. dollars at the then-applicable exchange rates. Consequently, increases and decreases in the value of the U.S. dollar versus the Canadian dollar will affect the value of these items in our financial statements, even if their value has not changed in Canadian dollars and as a result, our financial results could be more volatile as a result of the transaction. Although we may enter into transactions to hedge portions of this foreign currency translation exposure, we will not be able to eliminate this exposure.

 

Future sales of our common stock could cause our stock price to decline.

 

Sales of substantial amounts of common stock by our officers, employees and other stockholders, or the possibility of such sales, may adversely affect the price of our common stock and impede our ability to raise capital in the future through the issuance of equity securities.

 

The consummation of the transaction will result in the issuance of an additional 7,009,112 shares of our common stock (including exchangeable shares). Subject to certain exceptions, these additional shares of common stock (including exchangeable shares) will become available for future sale upon the expiration or the waiver of transfer restrictions or in accordance with registration rights. See “The Arrangement Agreement and Related Agreements — Additional Agreements — Shareholders’ Equity Agreement” for a discussion of when these additional shares will become available for future sale.

 

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

 

This proxy statement, and the documents to which we refer you in this proxy statement, contain “forward-looking” statements. In some cases, you can identify these statements by forward-looking words such as “may”, “might”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “estimate”, “predict”, “optimistic”, “potential”, “intend” or “continue”, the negative of these terms and other comparable terminology. These statements are only predictions based on our current expectations about future events. There are important factors that could cause our actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements.

 

Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy or completeness of any of these forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. We are under no duty to update any of these forward-looking statements after the date of this proxy statement to conform our prior statements to actual results or revised expectations.

 

In addition to other factors and matters contained or incorporated in this proxy statement, we believe the following factors could cause actual results to differ materially from those discussed in the forward-looking statements:

 

 

and other risks detailed under “Risk Factors” beginning on page 8 and in our current filings with the Securities and Exchange Commission, or the SEC, including our Annual Report on Form 10-K for 2006 and our Quarterly Reports on Form 10-Q filed thereafter. See “Additional Information”.

 

You should carefully consider the cautionary statements contained or referred to in this section in connection with any subsequent written or oral forward-looking statements that may be issued by us or persons acting on our behalf.

 

SELECTED FINANCIAL INFORMATION

 

Selected Historical Consolidated Financial Information of Thomas Weisel Partners

 

Set forth below is the consolidated financial information and other information of Thomas Weisel Partners as of and for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 and for the six months ended June 30, 2007 and 2006 (in thousands, except per share data). The selected consolidated statement of operations data for the years ended December 31, 2002, 2003, 2004, 2005 and 2006, and the selected consolidated statement of financial condition data as of December 31, 2003, 2004, 2005 and 2006, are derived from the audited consolidated financial statements of Thomas Weisel Partners Group, Inc. (formerly Thomas Weisel Partners Group LLC). The selected consolidated statement of operations data for the six months ended June 30, 2006 and 2007, and the selected consolidated statement of financial condition data as of June 30, 2006 and 2007 are derived from the unaudited condensed consolidated financial statements of Thomas Weisel Partners Group, Inc. (formerly Thomas Weisel Partners Group LLC). The selected consolidated statement of financial condition data as of December 31, 2002 have been derived from unaudited consolidated financial statements of Thomas Weisel Partners Group LLC. The information below should be read in conjunction with Thomas Weisel Partners’ consolidated financial statements and the notes to Thomas Weisel Partners’ consolidated financial statements and with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections in Thomas Weisel Partners’ Annual Report on Form 10-K for 2006 and Thomas Weisel Partners’ Quarterly Reports on Form 10-Q filed thereafter that are incorporated by reference in this proxy statement. See “Additional Information” beginning on page 84.

 

Selected Historical Consolidated Financial Information of
Thomas Weisel Partners

 

 

 

 

 

Selected Historical Consolidated Financial Information of Westwind

 

Set forth below is the consolidated financial information of Westwind as of and for the years ended December 31, 2006, 2005, 2004, 2003 and 2002 and for the six months ended June 30, 2007 and 2006. The selected consolidated statement of operations data for the years ended December 31, 2002, 2003, 2004, 2005 and 2006, and the selected consolidated statement of financial condition data as of December 31, 2002, 2003, 2004, 2005 and 2006, are derived from the audited consolidated financial statements of Westwind. The selected consolidated statement of operations data for the six months ended June 30, 2006 and 2007, and the selected consolidated statement of financial condition data as of June 30, 2006 and 2007 are derived from the unaudited consolidated financial statements of Westwind. The data below should be read in conjunction with Westwind’s consolidated financial statements and the notes to Westwind’s consolidated financial statements in Annex D and with the information set forth in “Information About Westwind — Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Westwind prepares its financial statements in accordance with Canadian GAAP, which (in the case of the consolidated financial statements of Westwind) conform in all material respects with U.S. GAAP. See Note 10 to Westwind’s historical financial statements in Annex D. All dollar amounts referred to below are in Canadian dollars.

 

 

Per Share Data

 

The following table sets forth certain historical per share data for Thomas Weisel Partners and pro forma combined per share data after giving effect to the transaction. This data should be read in conjunction with our consolidated financial statements and the notes to our consolidated financial statements included in our Annual Report on Form 10-K for 2006 and Quarterly Report on Form 10-Q for the quarter ended June 30, 2007, incorporated by reference herein. See “Additional Information”. In addition, this data should be read in conjunction with our unaudited pro forma condensed combined financial statements included in this proxy statement (see “Unaudited Pro Forma Financial Information”) and Westwind’s consolidated financial statements and notes to consolidated financial statements attached to this proxy statement as Annex D. Comparative per share data has not been provided for Westwind as Westwind is a private company and comparative data on a per share basis would not be meaningful.

 

 

UNAUDITED PRO FORMA FINANCIAL INFORMATION

 

The following unaudited pro forma condensed consolidated statement of financial condition as of June 30, 2007 and the unaudited pro forma condensed consolidated statements of operations for the year ended December 31, 2006 and the six months ended June 30, 2007 give effect to Thomas Weisel Partners’ proposed acquisition of Westwind as if the acquisition had occurred on June 30, 2007 for the condensed consolidated statement of financial condition and as of January 1, 2006 for purposes of the condensed consolidated statements of operations. The unaudited pro forma condensed consolidated financial statements are based on historical financial statements of Thomas Weisel Partners and Westwind, giving effect to the proposed acquisition applying the assumptions and adjustments as discussed in the accompanying notes to the pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated financial statements should be read in conjunction with the Annual Report on Form 10-K for the year ended December 31, 2006 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2007 and June 30, 2007 for Thomas Weisel Partners, as well as the historical financial statements of Westwind (attached to this proxy statement as Annex D).

 

The unaudited pro forma financial statements were prepared using the purchase method of accounting with Thomas Weisel Partners treated as the accounting acquiror. The unaudited pro forma condensed consolidated financial statements do not purport to be indicative of the financial position or results of operations that would have actually been obtained had such transactions been completed as of the assumed dates and for the periods presented, or which may be obtained in the future. The pro forma adjustments are described in the accompanying notes and are based upon available information and certain assumptions that management of Thomas Weisel Partners believes are reasonable.

 

For purposes of preparing this pro forma information, a preliminary allocation of the transaction consideration has been made to intangible assets. Net tangible assets were valued at their respective carrying amounts as management believes that these amounts approximate their current fair values. These pro forma adjustments represent Thomas Weisel Partners’ preliminary determination of purchase accounting adjustments and are based upon available information and certain assumptions that Thomas Weisel Partners’ management believes to be reasonable. Consequently, the amounts reflected below are subject to change and the actual allocation of the purchase price and the resulting effect on net income from operations may differ.

 

Unless otherwise stated, all amounts presented in this section are in U.S. dollars.

 

The following sets forth the preliminary purchase price and purchase price allocation (amounts in thousands):

 

THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT
OF FINANCIAL CONDITION
AS OF JUNE 30, 2007

 

THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2007

 

THOMAS WEISEL PARTNERS GROUP, INC. AND SUBSIDIARIES

 

UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2006

 

 

Notes to the Unaudited Pro Forma Condensed Consolidated Combined Financial Statements

 

(a) The acquisition of Westwind by Thomas Weisel Partners for a purchase price of (i) $45 million in cash and (ii) 7,009,112 shares of Thomas Weisel Partners common stock or exchangeable shares. The fair value of the Thomas Weisel Partners common stock to be issued was based upon the average of the closing prices of one share of common stock during the five trading day period beginning two trading days prior to the date the transaction was announced.

 

(b) The arrangement agreement provides for a pre-closing cash distribution by Westwind to its shareholders of excess working capital over agreed-upon working and regulatory capital amounts, calculated in accordance with the arrangement agreement. Thomas Weisel Partners’ preliminary determination of the amount of this pre-closing cash distribution is $10.6 million.

 

(c) To record goodwill and other intangible assets based upon the estimated purchase price and preliminary allocation.

 

(d) Acquisition costs accrued for and included in the purchase price determination.

 

(e) To record the adjustment for deferred tax liabilities related to other intangible assets.

 

(f) The elimination of a shareholder loan, Westwind share capital and retained earnings.

 

(g) Reflects the amortization of other intangible assets of $5.6 million and $11.5 million for the six months ended June 30, 2007 and the year ended December 31, 2006, respectively. Amortization amounts assume the following useful lives for each intangible asset:

 

 

The useful lives of other intangible assets represent Thomas Weisel Partners’ preliminary determination and are based upon available information and certain assumptions that Thomas Weisel Partners’ management believe to be reasonable.

 

The following table provides the first five years of estimated amortization of the other intangible assets based on an accelerated method of amortization over the respective useful lives (in thousands):

 

 

(h) To record an income tax impact on the pre-tax pro forma adjustments at Thomas Weisel Partners’ statutory tax rate of 42%.

 

(i) Westwind financial statements have been converted from Canadian dollars to U.S. dollars for the pro forma financial statement presentation. For the unaudited pro forma condensed consolidated statement of financial condition, balances were converted based on the exchange rate as of June 30, 2007 which was 0.9443. For the unaudited pro forma condensed consolidated statement of operations for the six months ended June 30, 2007, amounts were converted based on the average exchange rate for the period from January 1, 2007 to June 30, 2007 which was 0.8820. For the unaudited pro forma condensed consolidated statement of operations for the year ended December 31, 2006, amounts were converted based on the average exchange rate for the period from January 1, 2006 to December 31, 2006 which was 0.8821.

 

(j) An adjustment to interest income for the estimated interest amount that would not have been recognized by Thomas Weisel Partners during the six months ended June 30, 2007 and the year ended December 31, 2006 on the $45 million cash portion of the transaction consideration. The weighted average interest rate for the six months ended June 30, 2007 and the year ended December 31, 2006 is estimated to be 3.80% and 3.61%, respectively.

 

THE SPECIAL MEETING

 

General

 

We are furnishing this proxy statement to all holders of record of Thomas Weisel Partners common stock in connection with the solicitation of proxies by the Thomas Weisel Partners board of directors for use at the special meeting of Thomas Weisel Partners shareholders to be held on December 14, 2007, and at any adjournment or postponement thereof.

 

Thomas Weisel Partners’ common stock is listed on The Nasdaq Global Market. The listing rules of The Nasdaq Global Market require that we obtain shareholder approval prior to completing any transaction that would result in the issuance of more than 20% of our outstanding common shares. Under the proposed acquisition of Westwind, we will issue shares of common stock (either directly or on exchange of exchangeable shares) representing, in the aggregate, in excess of 20% of our outstanding common stock.

 

Although Thomas Weisel Partners shareholders are not being asked to vote directly on the arrangement agreement or the plan of arrangement, the issuance of Thomas Weisel Partners common stock and the exchangeable shares is necessary in order to complete the acquisition of Westwind as contemplated by those agreements.

 

Date, Time and Place of the Special Meeting

 

The special meeting will be held on December 14, 2007, at 8:00 a.m., Pacific time, at our corporate offices at One Montgomery Street, 35^th Floor, San Francisco, California 94104.

 

Purpose of the Special Meeting

 

At the special meeting, and any adjournment or postponement thereof, Thomas Weisel Partners shareholders will be asked:

 

1. To consider and vote on a proposal to approve the issuance of shares of Thomas Weisel Partners common stock (including shares issuable in respect of exchangeable shares) as contemplated by the arrangement agreement and the plan of arrangement.

 

2. To conduct any other business that properly comes before the special meeting and any adjournment or postponement of the special meeting, including any proposal to adjourn the meeting to solicit additional proxies in favor of the foregoing proposal.

 

Copies of the arrangement agreement and the form of plan of arrangement are attached to this proxy statement as Annexes A and B. Thomas Weisel Partners shareholders are encouraged to read the arrangement agreement, the plan of arrangement and the other information contained in this proxy statement, including the annexes, carefully before deciding how to vote.

 

Record Date

 

We have fixed the close of business on November 6, 2007 as the record date for the special meeting or any postponement or adjournment thereof, and only holders of record of Thomas Weisel Partners common stock on the record date are entitled to vote at the special meeting. On the record date, there were 25,551,505 shares of Thomas Weisel Partners common stock outstanding and entitled to vote. Each share of common stock entitles its holder to one vote on all matters properly coming before the special meeting.

 

Quorum Requirements

 

The holders of a majority of the outstanding shares of Thomas Weisel Partners common stock on November 6, 2007, present in person or represented by proxy and entitled to vote, will constitute a quorum for the transaction of business at the special meeting. Abstentions and “broker non-votes” are treated as present for quorum purposes.

 

Voting Requirements

 

You may vote “for”, “against” or “abstain” with respect to the proposal to approve the Thomas Weisel Partners share issuance. A majority of the votes cast “for” or “against” the proposed Thomas Weisel Partners share issuance

must be voted “for” the proposal for it to pass. An abstention is not treated as a vote “for” or “against”, and will have no effect on the outcome of the vote.

 

Broker Authority to Vote

 

Under the rules of the New York Stock Exchange, Inc., member brokers that do not receive instructions from their customers to vote do not have discretionary voting authority to vote their customers’ shares at the special meeting because the approval of the Thomas Weisel Partners share issuance is not considered a routine matter.

 

Independent Election Inspector

 

We have retained Broadridge Financial Solutions to receive and tabulate the votes in connection with the special meeting. We have also retained through Broadridge Financial Solutions, an independent election inspector. The independent election inspector will certify the election results and perform any other acts required by the Delaware General Corporation Law.

 

Expenses of Solicitation

 

We are paying for costs associated with the preparation of proxy materials and solicitation of proxies from our shareholders for the special meeting. Although there are no formal agreements to do so, we will reimburse banks, brokerage firms and other custodians, nominees and fiduciaries for their reasonable expenses incurred in sending proxy materials to our shareholders and beneficial owners of Thomas Weisel Partners common stock in accordance with applicable rules. In addition to solicitation by mail, our directors, officers and employees may solicit proxies in person, by telephone, by fax or by electronic or other means of communication, but they will not receive special compensation for such activities.

 

Voting of Proxies at the Special Meeting and Revocation of Proxies

 

You can vote your shares by marking, signing and returning the enclosed proxy card, or you can vote through the Internet or by telephone. If you properly submit your proxy by any of these methods and you do not subsequently revoke your proxy, your shares will be voted in accordance with your instructions.

 

If you sign your proxy card but do not mark it to give voting instructions, your shares will be voted as follows:

 

 

otherwise in accordance with the judgment of the persons voting the proxy on any other matter properly brought before the special meeting and any adjournment or postponement thereof, including any proposal to adjourn the meeting to solicit additional proxies in favor of the foregoing proposal.

 

A proxy submitted through the Internet or by telephone may be revoked by (i) executing a later-dated proxy card that is received prior to 11:59 p.m., New York City time, on December 13, 2007, (ii) subsequently submitting a new proxy through the Internet or by telephone prior to 11:59 p.m., New York City time, on December 13, 2007 or (iii) attending the special meeting and voting in person. A proxy submitted by proxy card may be revoked before the vote is cast by the designated proxy by (i) giving written notice to our Secretary & General Counsel at One Montgomery Street, 37th Floor, San Francisco, California 94104, (ii) subsequently submitting another proxy bearing a later date or (iii) attending the special meeting and voting in person. Attending the special meeting without voting will not revoke your previously submitted proxy.

 

If you hold shares in “street name” (that is, through a bank, broker or other nominee) and would like to attend the special meeting, you will need to bring an account statement or other acceptable evidence of ownership of Thomas Weisel Partners common stock as of the close of business on November 6, 2007, the record date for voting. If you hold shares in “street name”, then in order to vote at the special meeting you will also need to bring a valid “legal proxy”, which you can obtain by contacting your account representative at the bank, broker or nominee through which you hold your shares.

 

Dissenters’ Appraisal Rights

 

There are no appraisal or dissenters’ rights associated with the matter we have scheduled for a vote at the special meeting.

 

Other Matters

 

The board of directors does not currently intend to bring any other business before the special meeting and, to the knowledge of the board of directors, no other matters other than those indicated above are to be brought before the special meeting. If, however, any other matter properly comes before the special meeting, the proxy holders will, in their discretion, vote on it in accordance with their own best judgment.

 

Independent Registered Public Accounting Firm

 

A representative of Deloitte & Touche LLP is expected to be present at the special meeting, will have the opportunity to make a statement if he or she desires to do so and will be available to respond to appropriate questions from shareholders.

 

WHETHER OR NOT YOU PLAN TO ATTEND THE SPECIAL MEETING, PLEASE COMPLETE, DATE, SIGN AND RETURN, AS PROMPTLY AS POSSIBLE, THE ENCLOSED PROXY IN THE ACCOMPANYING REPLY ENVELOPE, OR SUBMIT YOUR PROXY BY TELEPHONE OR THE INTERNET. SHAREHOLDERS WHO ATTEND THE MEETING MAY REVOKE THEIR PROXIES AND VOTE IN PERSON.

 

Questions and Additional Information

 

If you have more questions about the transaction or how to submit your proxy, or if you need additional copies of this proxy statement or the enclosed proxy card or voting instructions, please call our Shareholder Services Department at (415) 364-2500.

 

THE COMPANIES

 

Thomas Weisel Partners Group, Inc.

 

We are an investment bank specializing in the growth sectors of the economy. Our headquarters are in San Francisco and we have additional offices in Baltimore, Boston, Chicago, Cleveland, New York, Portland, Silicon Valley, London and Mumbai. We provide investment banking, brokerage, research and asset management services tailored to meet the particular needs of our clients. We were founded in 1998 by Thomas W. Weisel, who was Chairman and Chief Executive Officer of Montgomery Securities for more than 20 years. On February 7, 2006, Thomas Weisel Partners Group, Inc. succeeded to the business of Thomas Weisel Partners Group LLC and completed an initial public offering of its common stock.

 

We have organized our business to focus principally on the growth sectors of the economy, including the technology, healthcare and consumer sectors. We believe that this focus allows us to capitalize on the business opportunities created by many of the primary drivers of innovation, growth and capital investment in the U.S. economy.

 

Our principal executive offices are located at One Montgomery Street, San Francisco, California 94104 and our telephone number is (415) 364-2500.

 

Westwind Capital Corporation

 

Westwind is an independent, institutional investment banking firm focused on growth companies, particularly in the energy and mining sectors. Westwind’s services include investment banking services, including capital-raising transactions and mergers and acquisitions advisory services, equity trading and equity research on Canadian and U.K. publicly-listed companies. Westwind’s registered office is located at 70 York Street, Toronto, Ontario Canada M5J 1S9 and its telephone number is (416) 815-0888.

 

TWP Acquisition Company (Canada), Inc.

 

TWP Acquisition Company (Canada), Inc. is an indirect wholly-owned subsidiary of Thomas Weisel Partners and is referred to in this proxy statement as Canadian Sub. Canadian Sub is a corporation organized under the Ontario Business Corporations Act on September 27, 2007 for the sole purpose of participating in the transaction. After the transaction is completed, Canadian Sub will continue to be an indirect subsidiary of Thomas Weisel Partners. Canadian Sub’s registered office is located at 199 Bay Street, Suite 5300 Commerce Court West, Toronto, Ontario Canada M5L 1B9 and its telephone number is (415) 364-2500.

 

TWP Holdings Company (Canada), ULC

 

TWP Holdings Company (Canada), ULC is a direct wholly-owned subsidiary of Thomas Weisel Partners and is referred to in this proxy statement as CallRightCo. CallRightCo is an unlimited liability company formed under the laws of the Province of Nova Scotia on September 28, 2007 for the sole purpose of participating in this transaction. CallRightCo will hold the call rights related to the exchangeable shares as well as the voting shares of Canadian Sub. After the transaction is completed, CallRightCo will continue to be a direct wholly-owned subsidiary of Thomas Weisel Partners. CallRightCo’s registered office is located at Suite 900, 1959 Upper Water Street, P.O. Box 997, Halifax, Nova Scotia Canada B3J 3N2 and its telephone number is (415) 364-2500.