The Edelman Financial Center Agrees to Acquisition by Sanders Morris Harris Group

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The Edelman Financial Center, the largest and most prominent financial planning firm in the Washington, DC region, has agreed to be acquired by Sanders Morris Harris Group Inc. (NASDAQ: SMHG).

The Edelman Financial Center, the largest and most prominent financial planning firm in the Washington, DC region, has agreed to be acquired by Sanders Morris Harris Group Inc. (NASDAQ: SMHG).

SMHG, a leading diversified financial services holding company that was ranked in 2004 by Fortune as the nation’s 14th fastest-growing public company, has purchased a 51% interest in the business of EFS and will acquire the remainder over five years. EFC Founder and Chairman Ric Edelman has entered into a long-term employment agreement with the business and will continue to operate the company. Edelman also will become one of SMHG’s significant shareholders as the balance of the business is acquired by SMHG.

“Serving the needs of our clients is our top priority,” said Edelman, “and joining the highly qualified professionals of Sanders Morris Harris Group will help us to maintain that ability for years to come.”

Through its subsidiary, Edelman Financial Services, The Edelman Financial Center, based in Fairfax, Virginia, provides financial planning services with respect to more than $2.6 billion for individuals and families. Ric Edelman is a #1 best-selling author who has written five books on personal finance, including the classic The Truth About Money. His books have been translated into six languages and collectively have sold more than 1 million copies. Edelman hosts weekly financial planning programs on WMAL Radio (Saturday 10am-11:45am) and Newschannel 8 (Monday 8:30pm) and is frequently quoted in the media. The firm has won more than 60 awards; in 2004 alone, Registered Rep Magazine listed Ric Edelman as one of “America’s Top 50 Advisors,” Research Magazine ranked him the #1 advisor in the nation for his focus on the individual client and inducted Edelman into its Financial Advisor Hall of Fame, and Bloomberg Wealth Manager ranked EFS the largest independent financial planning and investment management firm in the nation based on number of clients.

Acquiring The Edelman Financial Center furthers SMHG’s position in the mass affluent market and brings SMHG’s total assets under management to $10 billion. SMHG expects the transaction to be accretive to its current year earnings. Edelman’s 2004 revenues were $17.7 million and its pretax net income $3.2 million adjusting for one-time expenses. The details of the Edelman transaction are included in an 8-K filing available on the Company’s website.

“Adding The Edelman Financial Center to our asset management and financial planning group fits our strategy of providing our clients with the full spectrum of services and investment opportunities. We expect to leverage the financial planning services provided by The Edelman Financial Center across our other asset management businesses,” said Robert E. Garrison II, President of Sanders Morris Harris Group.

George L. Ball, Chairman of Sanders Morris Harris Group, commented, “We are delighted that Ric Edelman and his team of high caliber professionals have elected to join SMHG. We look forward to assisting them as they help their clients build wealth and financial security.”

Sanders Morris Harris Group is a diversified financial services holding company based in Houston, Texas that provides investment banking services and manages over $10 billion in client assets. Its operating entities are Sanders Morris Harris, Charlotte Capital, Kissinger Financial Center, Pinnacle Trust Co., Salient Partners, SMH Capital Advisors and Select Sports Group.

Additional information is available at

Additional information regarding Ric Edelman and The Edelman Financial Center is available at

Putnam Lovell NBF Securities acted as financial advisor to The Edelman Financial Center, and Simpson Thacher & Bartlett LLP acted as transaction counsel.

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