Sprott Asset Management, an alternative asset manager focusing on precious metal and real asset investments, has agreed to purchase the gold strategies business of Tocqueville Asset Management.
Under the agreement, Sprott will assume the responsibility of managing the gold strategies managed by the Tocqueville gold investment team such as the Tocqueville Gold Fund.
The maximum deal consideration is $50m, of which $15m will be paid upfront through cash and stock. Sprott will fund the cash portion of the deal using existing cash reserves.
The remainder will be paid over two years after deal completion, based on the fulfilment of certain financial conditions.
The transaction, which is pending regulatory approval, will add $1.9bn in assets to Sprott’s books.
Tocqueville president, CEO and CIO Robert Kleinschmidt said: “We believe that this transaction is an excellent fit for our mutual fund shareholders and our clients.”
Upon deal completion in January next year, the Tocqueville gold investment team will move to Sprott. The team includes senior portfolio manager John Hathaway along with portfolio managers Douglas Groh and Ryan McIntyre.
Sprott president Whitney George said: “John Hathaway and his team are among the world’s most respected gold equities managers and we have enjoyed an excellent working relationship during the planning and launch of our joint venture over the past year.
“This transaction is a natural extension of that partnership, through which John will become a Sprott shareholder.”
Tocqueville was represented by Seward & Kissel LLP in the transaction.