The FBR & Co [profile] team just found a buyer for their $1.9-billion mutual fund business. On Wednesday, FBR & Co. president and CEO Richard Hendrix revealed that Novato, California-based Hennessy Advisors [profile] will buy the 10 FBR funds.
The deal would push Hennessy's assets under management to more than $2.7 billion. The sale is set to close in the third quarter. According to a separate announcement from FBR, Hennessy will initially pay about $28.75 million or 1.51 percent of AUM for the FBR mutual fund business.
FBR Fund Advisers president and chief investment officer Dave Ellison will join Hennessy as a PM after the close.
Hennessy will also collapse three of FBR's ten mutual funds into three of Hennessy's funds. The other seven FBR funds will stay separate and keep their PMs within Hennessy.
The deal comes after news broke just last week that FBR was shopping its mutual fund business. FBR filed an 8-K on May 30 disclosing that it had been "working with outside advisors who are assisting the Company in its evaluation of strategic alternatives for its asset management business, including the sale of all or a portion of the business."
Company Press Release
Hennessy Advisors, Inc. to Acquire FBR Funds
NOVATO, Calif., June 6, 2012 -- Hennessy Advisors, Inc. today announced that it has signed a definitive agreement with FBR Fund Advisers, Inc. to purchase the assets related to the management of the entire family of ten FBR Funds. The FBR Funds currently have assets exceeding $1.9 billion, which would bring total assets managed by Hennessy Advisors to over $2.7 billion after the acquisition. The transaction is expected to be completed in the third quarter of 2012.
Upon completion of the transaction, which is subject to regulatory review and the approval of the Hennessy Funds Board of Trustees, the FBR Funds Board of Trustees and the FBR Funds' shareholders, Hennessy Advisors will become the investment manager of the FBR Funds. The assets related to the FBR Large Cap Fund, the FBR Small Cap Fund and the FBR Mid Cap Fund will merge into the Hennessy Cornerstone Large Growth Fund, the Hennessy Cornerstone Growth Fund and the Hennessy Focus 30 Fund, respectively, with shareholders of these Funds becoming shareholders of the applicable Hennessy Fund. The remaining seven Funds will move under the Hennessy investment management umbrella, but will continue to be managed by the same portfolio managers that oversee the portfolios today. Dave Ellison, FBR President and CIO, and Winsor Aylesworth, FBR Portfolio Manager, will join the Hennessy team of employees and continue the day to day management of the FBR Gas Utility Index Fund, the FBR Small Cap Financial Fund, the FBR Large Cap Financial Fund and the FBR Technology Fund. The FBR Focus Fund will continue to be managed by David Rainey, Brian McCauley and Ira Rothberg, who will serve as sub-advisors to the Fund, with Hennessy Advisors as the investment manager. The FBR Balanced Fund and the FBR Core Bond Fund will retain their current sub-advisory relationships, with Hennessy Advisors as the investment manager. In addition to members of the portfolio management team, members of the current FBR distribution, marketing, trading, compliance and trading departments will also join the Hennessy team.
"We couldn't be more pleased to be joining the Hennessy family," said Dave Ellison, President and CIO of FBR Fund Advisers, Inc. "We believe there is great synergy between our firms, and we look forward to continuing to provide excellent portfolio management under the leadership of Hennessy Advisors, Inc.," noted Mr. Ellison.
Richard J. Hendrix, President and CEO of FBR & Co. FBRC +2.56% , the parent company of FBR Fund Advisers commented, "Hennessy Advisors is committed to the asset management business and has a solid reputation in the mutual fund industry. With the addition of key FBR Fund Advisers personnel to the Hennessy team, I am confident these fund shareholders will be well served by Neil Hennessy and Hennessy Advisors."
"We are absolutely thrilled to have the world-class FBR portfolio management team join our ranks and we look forward to strengthening our marketing and distribution, trading and compliance efforts through the addition of these FBR employees," said Neil Hennessy, Chairman, CEO and President of Hennessy Advisors. "We look forward to welcoming FBR shareholders into the Hennessy family, and we are committed to a smooth transition. At Hennessy, we strive to deliver strong investment management and performance, quality customer service and a high standard of business ethics to our shareholders, and we are very proud of our track record in each of these areas," added Hennessy.
About Hennessy Advisors, Inc.
Hennessy Advisors, Inc. is a publicly traded investment manager of a wide range of both domestic and international equity products. Hennessy Advisors, Inc. is committed to its consistent and repeatable investment process, combining proven stock selection strategies with a highly disciplined, team-managed approach, and to superior service to shareholders.
Additional InformationNothing in this press release shall be considered a solicitation to buy or an offer to sell a security to any person in any jurisdiction where such offer, solicitation, purchase or sale would be unlawful prior to registration under the applicable securities laws.
This press release contains forward-looking statements, which do not relate strictly to historical or current facts. Forward-looking statements are beyond the ability of Hennessy Advisors to control and, in many cases, Hennessy Advisors cannot predict what factors would cause actual results to differ materially from those indicated by forward-looking statements. Among other risks and uncertainties is the ability of Hennessy Advisors to successfully manage and distribute the FBR Funds. As a result, no assurance can be given as to future results, levels of activity, performance or achievements, and Hennessy Advisors assumes no responsibility for the accuracy and completeness of any forward-looking statements.
This press release is not a solicitation of a proxy from any shareholder of the FBR Funds. In soliciting shareholder approval of the transactions, the Hennessy Funds and the FBR Funds and their respective trustees, Hennessy Advisors and FBR Fund Advisers may be deemed to be participants in the solicitation. Information about the trustees of the Hennessy Funds may be found in its 2011 Annual Report filed with the SEC on January 6, 2012 and Statement of Additional Information filed with the SEC on February 28, 2012. Information about the trustees of the FBR Funds may be found in its 2011 Annual Report filed with the SEC on January 6, 2012 and Statement of Additional Information filed with the SEC on February 29, 2012. Shareholders of the FBR Funds should read the prospectus/proxy statement and proxy statement that will be filed in connection with the solicitation because it will contain important information, including a description of any direct or indirect interest of the participants in the solicitation. The prospectus/proxy statement and proxy statement and other relevant documents (when available) may be obtained free of charge from the SEC's website at www.sec.gov or by calling 1-800-966-4354.
Company Press Release
FBR & Co. Extends Self Tender Offer
ARLINGTON, Va., June 7, 2012 -- FBR & Co. (Nasdaq:FBRC) ("FBR" or the "Company"), a leading investment bank serving the middle market, today announced that it is extending its previously announced modified "Dutch auction" tender offer to purchase up to four million shares of FBR & Co. common stock at a price of not less than $2.75 and not more than $3.00 per share, until 12:00 midnight, New York City time on June 13, 2012, unless further extended. The tender offer was previously set to expire at 12:00 midnight, New York City time on June 6, 2012.
As of the close of business on June 6, 2012, approximately 13.16 million shares of common stock had been tendered and not withdrawn from the offer. These tendered shares constitute approximately 23.8% of the outstanding shares of FBR common stock.
The Company is extending the tender offer because it has signed a definitive agreement with Hennessy Advisors, Inc. to sell the assets related to the management of the entire family of ten FBR Funds for an initial payment upon closing, and a subsequent payment upon the first anniversary of closing, in each case based on assets under management for the applicable funds and currently anticipated to be approximately $28.75 million in total based on assets of $1.9 billion as of March 31, 2012. The transaction is expected to be completed in the third quarter of 2012. Upon completion of the transaction, which is subject to regulatory review and is also subject to the approval of the Hennessy Funds Board of Trustees, the FBR Funds Board of Trustees and the FBR Funds' shareholders, and other agreed conditions to closing, Hennessy Advisors will become the investment manager of the FBR Funds.
FBR has retained FBR Capital Markets & Co. as the dealer manager for the tender offer and D.F. King & Co., Inc. as the information agent.
Copies of the Offer to Purchase and the related Letter of Transmittal have previously been mailed to holders of FBR & Co. shares. Additional copies of the Offer to Purchase, the related Letter of Transmittal or the Notice of Guaranteed Delivery may be obtained at FBR's expense from the information agent, D.F. King & Co., Inc. at (800) 758-5880óbanks and brokerage firms please call (212) 269-5550.
Questions regarding the tender offer should be directed to D.F. King & Co., Inc. at (800) 758-5880 (Toll-free).
About FBR & Co.
FBR & Co. (Nasdaq:FBRC) provides investment banking, merger and acquisition advisory, institutional brokerage, and research services through its subsidiary FBR Capital Markets & Co. FBR focuses capital and financial expertise on the following industry sectors: consumer; diversified industrials; energy & natural resources; financial institutions; insurance; real estate; and technology, media & telecom. FBR Fund Advisers, Inc., a subsidiary of FBR & Co., provides clients with a range of investment choices through The FBR Funds, a family of mutual funds. FBR is headquartered in the Washington, D.C. metropolitan area with offices throughout the United States.
The FBR & Co. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=6405
Certain Information Regarding the Tender Offer
The information in this press release describing FBR & Co.'s tender offer is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell shares of FBR & Co.'s common stock in the tender offer. The tender is being made only pursuant to the Offer to Purchase and the related materials that FBR & Co. distributed to its stockholders, as they may be amended or supplemented. Stockholders should read the Offer to Purchase and related materials carefully because they contain important information, including the various terms and conditions of the tender offer. Stockholders of FBR & Co. may obtain a free copy of the Tender Offer Statement on Schedule TO, the Offer to Purchase and other documents that FBR files with the Securities and Exchange Commission from the Commission's website at www.sec.gov. Stockholders may also obtain a copy of these documents, without charge, from D.F. King & Co., Inc., the information agent for the tender offer, toll free at (800) 758-5880. Stockholders are urged to carefully read these materials prior to making any decision with respect to the tender offer. Stockholders and investors who have questions or need assistance may call D.F. King & Co., Inc., the information agent for the tender offer, toll free at (800) 758-5880.