(Reuters) - Wealth management company National Financial Partners (>> National Financial Partners Corp.) said it agreed to be bought by private equity investment firm Madison Dearborn Partners LLC for about $1.3 billion, including convertible debt.

Madison Dearborn will pay $25.35 for each National Financial share, a premium of about 8 percent to the stock's Friday close.

Reuters first reported on March 12 that New York-based National Financial was exploring a possible sale of the company to private equity firms. Madison's offer price is a premium of 26 percent to trading levels on that day.

National Financial, which is run by Jessica Bibliowicz, the daughter of former Citigroup (>> Citigroup Inc.) chief Sandy Weill, faced difficulties during the downturn in 2008 and its stock hit a low of $1.21 that year.

BofA Merrill Lynch was the financial adviser to National Financial. Skadden, Arps, Slate, Meagher & Flom LLP served as legal adviser to National Financial.

UBS Securities LLC advised Madison Dearborn, while Ropes & Gray LLP served as its legal adviser.

National Financial shares were up about 7 percent before the bell on Monday.

(Reporting by Avik Das in Bangalore; Editing by Roshni Menon)

Stocks treated in this article : Citigroup Inc., National Financial Partners Corp.