Victory Capital has signed a definitive agreement to acquire WestEnd Advisor.
Under the agreement, Victory Capital will make an upfront payment upon closing of $480m with deferred earnout payments over a number of years upon the satisfaction of certain revenue growth targets.
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The deal is expected to close before the end of this year. The company expects the deal to be immediately accretive to earnings.
Founded in 2004, North Carolina-headquartered WestEnd offers model allocation strategies to financial advisors.
The firm, which oversees approximately $18bn in assets, provides four primary ETF strategies and a large cap core strategy, in tax efficient Separately Managed Account (SMA) structures.
WestEnd will become Victory Capital’s 12th investment franchise.
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By GlobalDataCommenting on the deal, Victory Capital CEO and chairman David Brown said: “The acquisition of WestEnd Advisors is very strategic and transformational to our business. It adds a high-quality and proven investment platform as well as a new product capability in a fast-growing market segment.
“WestEnd is well-positioned to continue benefiting from multiple secular industry tailwinds including the use of ETFs as cost-effective investment delivery vehicles, increasing adoption of model portfolios by financial intermediaries, and the move by a growing number of financial advisors to fee-based revenue models.”
WestEnd Advisors managing partner Michael Goldman said: “WestEnd has grown quickly as an independent company and we believe we can continue that growth by joining forces with the right partner. Victory Capital aligns culturally with WestEnd.
“They also possess the requisite scale and well-established distribution network to be additive to our existing distribution activities and should serve as a catalyst for future growth. There will be no changes to our proven investment process or to our team as a result of this transaction, which will provide for a smooth and seamless transition for our clients.”
Last year, Victory Capital agreed to purchase certain assets of US-based equity manager THB Asset Management.
The firm also bought a 15% stake in London-headquartered investment advisory firm Alderwood Partners the same year.
