30th Jun 2014 08:06
LONDON (Alliance News) - Asset manager Henderson Group PLC Monday said it has inked a deal to acquire Geneva Capital Management for up to USD200.0 million, as its bids to up its presence in North America and bring in institutional distribution capabilities to complement its retail franchise.
In a statement, Henderson said it has agreed to pay USD130.0 million up front for Geneva, which had USD6.3 billion in assets under management at the end of May, with a deferred amount of up to USD45.0 million payable over five years depending on revenue retention targets. In addition, there is an earn-out of up to USD25.0 million over the same period, which is conditional on certain revenue growth targets.
Henderson has been focused on growing its North American business, doubling its assets under management to USD12.0 billion at the end of May 2014, from USD5.9 billion at the end of 2011. The combined North American business now will have about USD18.3 billion in assets under management, about 15% of Henderson's group total.
"Developing our presence in North America is a strategic priority for Henderson. The acquisition of Geneva is a major step towards achieving our growth ambitions as a global asset manager. It will increase our assets under management in the US by over 50%, add investment management expertise in US equities, and extend our US institutional client base," Chief Executive Andrew Formica said in a statement.
Henderson, which is funding the deal with its existing cash resources, said it expects to pay USD10.0 million in transaction and integration costs. Most of these will be incurred in 2014. It expects the deal to boost its underlying earnings per share in the first full year after the deal closes. In addition, Henderson said the deal will enable it to develop new products and market itself to US institutions over time.
Founded in 1987, Geneva Capital Management is a US growth-equity manager, specialising in mid- and small-cap equities. It is headquartered in Milwaukee, Wisconsin and is owned by its employees.
Co-founders Bill Priebe and Amy Croen, together with managing principals Michelle Picard and Scott Priebe, who have all worked together for more than a decade, will continue to manage the firm. The acquisition's clients are made up of institutional investors and high-net-worth individuals.
Geneva's reported profit before tax for 2013 was USD15.4 million. Gross assets totalled USD8.6 million at the end of 2013.
Fenchurch Advisory Partners and Sandler O'Neill + Partners, LP advised Henderson on the deal, while Geneva was advised by Park Sutton Advisors.
This transaction is expected to close on October 1.
Henderson Group shares were early Monday quoted at 237.80 pence, up 0.6%.
By Samuel Agini; [email protected]; @samuelagini
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