Simpson Thacher is representing Oak Hill Capital Partners (“Oak Hill Capital”) in its investment in SWS Group, Inc. (“SWS Group”).  Oak Hill Capital and another investor, Hilltop Holdings Inc. (“Hilltop”), each agreed to invest in SWS Group through a $50 million loan, and SWS Group agreed to issue each of Hilltop and Oak Hill Capital a warrant to purchase common shares of SWS Group.

 

The extension of the loan and issuance of the warrants are conditioned on, among other things, receipt of requisite regulatory approvals, approval by the stockholders of SWS Group of the issuance of the warrants, maintenance by SWS Group of specified levels of deposits and other customary conditions.  Closing of these transactions is expected in the third calendar quarter of 2011.  Upon exercise of the warrants, Hilltop Holdings and Oak Hill Capital will each own approximately 17% of SWS Group.

 

Texas-based SWS Group, founded in 1972, has grown to become one of the nation’s top clearing firms and one of the leading regional securities firms headquartered in the Southwest.

The Simpson Thacher team for the transaction includes Lee Meyerson, Elizabeth Cooper, Daeyna Grant and Gibbs Fryer (M&A); Mark Chorazak (Bank Regulatory); Andrea Wahlquist, Tyler Andersen and Craig Katerberg  (Executive Compensation and Employee Benefits); Justin Lungstrum (Credit and Banking); Lesley Peng (Capital Markets); and Jon Goldstein  and Anthony Minervini (Tax).