Henderson Group, a UK-based fund manager, has signed into an agreement to acquire Geneva Capital Management for about US$200 million.
The acquisition will enable Geneva to add US equity investment capabilities and extend US institutional client base as well as will expand Henderson’s presence in the North America.
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Subject to customary closing conditions, the deal is expected to close on 1 October 2014.
The deal comprises an initial consideration of US$130 million, deferred consideration linked to revenue retention of up to US$45 million as well as growth-related earn-out of up to US$25 million.
Following the deal, Henderson expects to increase its assets under management in the US to US$18.3 billion.
The acquisitions of Geneva will double Henderson’s number of US-based investment professionals and quadruple Henderson’s US institutional AUM.
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By GlobalDataThe acquisition is expected to create opportunities to build new products with US content, launch new US equity retail products and market Henderson capabilities to US institutions.
As part of the deal, Geneva’s principals have signed long-term contracts to reinvest at least 30% of the net sale proceeds into Geneva products.
Additionally, the acquisition will develop a well-balanced client base, split broadly equally between retail and institutional. The fund manager will bear US$10 million integration and transaction costs, the majority of which will be incurred in 2014.
Andrew Formica, CEO of Henderson, said: "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.
"Henderson clients will gain access to Geneva’s strong track record in identifying high quality growth companies in US equities, while Geneva clients will continue to benefit from a stable team and an unchanged investment process, now backed by a global pure play asset manager."
Amy Croen, co-founder and managing principal of Geneva, said: "With the backing of a strong international partner who is very supportive of our existing investment strategy and platform, we look forward to taking our business to the next stage of its development.
