Rosemount, Ill.-based Wintrust Financial Corp., acquired Elektra Holding Company, LLC, the parent company of Chicago Deferred Exchange Company, LLC, for $52 million.
CDEC is a premier provider of Qualified Intermediary services for taxpayers seeking to structure tax-deferred like-kind exchanges under Internal Revenue Code Section 1031.
“With the acquisition of CDEC, we establish ourselves as a major player in the Qualified Intermediary market for tax-deferred exchanges under IRC Section 1031,” said Edward J. Wehmer, president and CEO of the $30 billion Wintrust. “CDEC’s services will augment the comprehensive range of services that Wintrust provides to our customers in the commercial real estate market. This transaction also provides Wintrust with a new fee-generating business and a significant new potential source of low-cost deposits.”
CDEC has successfully facilitated more than 8,000 like-kind exchanges in the past decade for taxpayers nationwide. These transactions typically generate customer deposits during the period following the sale of the property until such proceeds are used to purchase a replacement property. These deposit flows result in a source of low-cost deposits. During 2018, deposits from CDEC customers averaged over $1 billion.
Mary Cunningham will continue to serve as CEO of CDEC.
Kirkland & Ellis LLP acted as Elektra’s transaction counsel, and Schiff Hardin LLP served as transaction counsel to Wintrust. Colonnade Securities LLC acted as a financial advisor to Elektra.