Aberdeen Buys Another U.S. Fund Shop, and a British Private Equity Player, Too
Reported by Tommy Fernandez
Aberdeen Asset Management is buying again. Artio Global Investors Inc. today announced that it has entered into a $175-million agreement and plan of merger with Aberdeen. And Aberdeen's buying a $27-million majority stake in an international private equity shop, too.
New York City-based, publicly-traded Artio boasts about $14.3 billion in assets under management. As of December 31, Aberdeen had $314 billion in AUM worldwide.
Aberdeen CEO Martin Gilbert described the Artio deal as way to boost Aberdeen's U.S. distribution and "strengthen further" Aberdeen's "U.S. fixed income expertise."
The deal is slated to close by the end of Q2 or early Q3. J.P. Morgan advised Aberdeen on the deal.
During a recent meeting with MFWire staffers, Aberdeen’s head of Americas Gary Marshall outlined his firm’s ambitious plans for the United States. After launching a new office in Manhattan, the firm has worked aggressively to put itself on the New York map, hosting press events and even a quiz show.
Today Aberdeen also unveiled a deal to buy 50.1 percent of London-based private equity shop SVG Advisers from SVG Capital plc. The strategic alliance will involve a combined brand, Aberdeen SVG Private Equity, and will be led by SVG Capital chief Lynn Fordham. After three years, Aberdeen will have the option to snap up the remaining 49.9 percent of SVGA. SVGA boasts about $6.2 billion in AUM.
Aberdeen Asset Management Announces U.S. And European Acquisitions
PHILADELPHIA, Feb. 14, 2013 -- Aberdeen Asset Management PLC ("Aberdeen") announces that it has reached an agreement to acquire 100 percent of the share capital of Artio Global Investors Inc. ("Artio"), a publicly listed asset management company (the "Transaction").
The purchase consideration of approximately $175 million is based on a price of $2.75 per share and represents a premium of $34 million over Artio's unaudited net asset value as of Dec. 31, 2012. Artio is debt-free and had cash and seed investments of $136 million on its balance sheet as of Dec. 31, 2012. The purchase price will be payable in cash, financed out of Aberdeen's existing cash resources, on completion of the Transaction.
This acquisition will expand Aberdeen's North American business, deepen its distribution network in the region and add to its existing fixed income capabilities. The transaction is consistent with Aberdeen's stated strategy to identify suitable, quality businesses to complement the Group's organic growth.
Artio manages assets of approximately $14.3 billion on behalf of a diversified retail and institutional client base. Based on Artio's fourth quarter results, annual run-rate revenues were approximately $71 million, as of Dec. 31, 2012. Artio's assets under management ("AuM") include mutual fund assets of $7.2 billion. Artio comprises a $9.8 billion fixed income business which has delivered top quartile performance across its range of strategies including highly rated Global High Yield and Total Return Bond products and a $4.5 billion international and global equities business which will be transitioned to Aberdeen's top-performing global equity process post-completion. Artio's Global High Yield and High Grade teams are expected to join Aberdeen on completion of the Transaction.
The key benefits of the Transaction for Aberdeen are:
adds significant scale to existing U.S. fixed income business and complements organic efforts to expand distribution in the U.S., a priority growth market for Aberdeen;
adds established global high yield and U.S. total return offerings to Aberdeen which will complement Aberdeen's existing fixed income expertise;
provides access to Artio's distribution channels with a deeper penetration of the U.S. intermediary market, particularly the broker dealer & registered investment adviser segments which will also be of benefit to Aberdeen's existing product range; and
the Transaction is expected to be earnings enhancing from the outset.
The Transaction, which is currently expected to close by the end of the second quarter or early in the third quarter of 2013, is subject to customary closing conditions, including, U.S. antitrust approval, approval of a majority of Artio Global shareholders and approval of certain Artio Global mutual fund shareholders. As part of the Transaction, three of Artio's largest shareholders (representing approximately 45% of the total shareholding in aggregate) have entered into Voting Agreements providing that they will vote in favor of the Transaction.
Commenting on the Artio Transaction, Martin Gilbert, Chief Executive of Aberdeen Asset Management, said:
"This transaction is in line with Aberdeen's strategy of undertaking infill acquisitions that will assist with growing our business organically. It will be of benefit to our North American business, a region we view as a key growth market for Aberdeen. The integration of Artio's operations will strengthen further our U.S. fixed income expertise, in particular the addition of U.S. global high yield and total return products, and will help to broaden and deepen our distribution network in the U.S."
Aberdeen is also pleased to announce today that is it has agreed to acquire a 50.1% stake in SVG Advisers (SVGA), a wholly owned subsidiary of SVG Capital plc (SVGC), an international private equity investor and fund management business listed on the London Stock Exchange. This business will be combined with Aberdeen's existing private equity capability to create a substantial private equity fund of funds business. There is no direct impact on Aberdeen's U.S. business.
J.P. Morgan Limited (which conducts its UK Investment Banking activities as J.P. Morgan Cazenove) is acting as financial adviser and corporate broker to Aberdeen in connection with the Transaction, and Willkie Farr & Gallagher LLP is acting as Aberdeen's U.S. legal advisor.
About Aberdeen Asset Management
Aberdeen is an asset management company managing $314 billion of third party assets from our offices around the world, as of December 31, 2012. Our clients access our investment expertise drawn from three main asset classes: equities, fixed income and property, as well as tailored solutions. We package our skills in the form of segregated and pooled products across borders. We invest worldwide and follow a predominantly long-only approach, based on fundamentally sound investments.
Further information about Aberdeen can be found at www.aberdeen-asset.us
SOURCE Aberdeen Asset Management PLC
Company Press Release
Artio Global Investors Inc. Enters into Agreement to be Acquired by Aberdeen Asset Management PLC
NEW YORK --Artio Global Investors Inc. (NYSE: ART) (“Artio Global” or the “Company”), today announced that it has entered into an agreement and plan of merger (the “Merger Agreement”) with Aberdeen Asset Management PLC (“Aberdeen”), a global asset management firm listed on the London Stock Exchange, pursuant to which Aberdeen will acquire Artio Global for $2.75 in cash per share (the “Transaction”). The price represents a premium of approximately 34% over the closing price of Artio Global’s common stock as of February 13, 2013, and a premium of approximately 37% over the average closing price of Artio Global’s common stock during the 30 trading days ending February 13, 2013.
“I am delighted to be able to announce this merger, which we believe will be very beneficial for our clients and shareholders,” said Tony Williams, Chief Executive Officer of Artio Global. “Aberdeen brings vast financial strength, with a market cap of over $7.5 billion, and has a strong investment-centric culture consistent with Artio Global’s.”
“Our High Grade and Global High Yield teams will form a core part of Aberdeen’s fixed income capabilities, enhanced by the depth of its resources. We will continue to manage our International Equity and Global Equity strategies until the anticipated closing date, at which time Aberdeen will assume investment management responsibilities for them, subject to client consent. Aberdeen has a strong record of investment performance and we are confident that our clients will benefit from its robust investment process and global footprint of analytical resources.”
Artio Global’s Board of Directors, acting on the recommendation of a special committee of independent directors, unanimously approved the Merger Agreement and resolved to recommend that the Company’s shareholders vote to authorize and approve the Transaction.
Concurrently with the execution of the Merger Agreement, GAM Holding AG, Richard Pell and Rudolph-Riad Younes, have entered into voting agreements providing that they will vote in favor of the Transaction. In aggregate, these shareholders represent approximately 45% of the Company’s outstanding shares as of February 13, 2013. In addition, Messrs. Pell and Younes entered into an amended and restated tax receivable agreement with Aberdeen and Artio Global pursuant to which, effective at closing of the Transaction, Messrs. Pell and Younes agreed to waive certain provisions relating to a change in control of Artio Global and Aberdeen agreed to modify certain provisions relating to payments that Messrs. Pell and Younes were entitled to under the original tax receivable agreement.
The Transaction, which is currently expected to close by the end of the second quarter or early in the third quarter of 2013, is subject to customary closing conditions, including, U.S. antitrust approval, approval of a majority of Artio Global shareholders and approval of certain Artio Global mutual fund shareholders.
Goldman Sachs & Co. is acting as financial advisor and Davis Polk & Wardwell LLP is acting as legal advisor to the special committee of Artio Global’s Board of Directors. J.P. Morgan Limited is acting as financial advisor and Willkie Farr & Gallagher LLP is acting as legal advisor to Aberdeen.
About Artio Global
Artio Global Investors Inc. is the indirect holding company of Artio Global Management LLC (“Artio Global Management”), a registered investment adviser that actively invests in global fixed income and equity markets primarily for institutional and intermediary clients.
Headquartered in New York City, Artio Global Management offers a select group of investment strategies including High Grade Fixed Income, High Yield, International Equity and Global Equity. Access to these strategies is offered through a variety of investment vehicles, including separate accounts, commingled funds and mutual funds.
For more information, please visit www.artioglobal.com.
Company Press Release
Strategic alliance with Aberdeen Asset Management PLC
SVG Advisers’ parent company, SVG Capital plc (”SVG Capital”), has today announced it has entered into a strategic alliance with Aberdeen Asset Management PLC (”Aberdeen”). As part of this transaction SVG Capital has negotiated the sale of 50.1% of SVG Advisers Limited (”SVGA”) to Aberdeen.
The strategic alliance will combine SVGA’s private equity expertise with Aberdeen’s distribution platform, creating a leading private equity fund management business with assets under management or advice of €5.8 billion and significant growth potential. We believe it will enable SVGA to grow its investment platform and enter new markets faster, at lower cost and with more diversification than it could currently achieve on its own.
The combined business will be branded Aberdeen SVG Private Equity and will be led by Lynn Fordham who will also remain Chief Executive of SVG Capital. All of the staff within SVGA and the private equity team from Aberdeen will work for the strategic alliance. The same team will continue to advise the various funds managed or advised by SVGA. There will be an Aberdeen SVG Private Equity Board which will consist of Lynn Fordham, Andrew Sykes (Chairman of SVG Capital), Anne Richards (CIO of Aberdeen Asset Management) and John Brett (Head of Distribution of Aberdeen Asset Management).
The terms of the transaction are that at the end of the three year term Aberdeen has the option to acquire, and SVG Capital the option to sell, the remaining 49.9% stake at a price based on a valuation of the business at the time the option is exercised. The transaction is subject to regulatory consent, certain other customary matters and is expected to be completed in the first half of 2013.
Martin Gilbert, chief executive of Aberdeen Asset Management PLC, commented: “SVGA’s considerable experience and track record, combined with Aberdeen’s own asset management expertise and global distribution network will position us well to meet demand from investors seeking exposure to private equity. Institutional investors are increasingly looking towards alternative asset classes, including private equity, to diversify their portfolios and offer additional sources of alpha.”
Lynn Fordham, chief executive of SVG Capital plc, added: “This is an exciting development for both SVGA and Aberdeen. Combined, SVGA’s long-established private equity expertise and Aberdeen’s global distribution network and fund management capability will create a solid platform from which the Aberdeen SVG franchise can grow. I look forward to working with the Aberdeen team in what I am confident will mark the start of an exciting union with significant potential.”
SVGA was established in 2001 and its funds have since gone on to commit over €7.5 billion to private equity funds globally, developing a long and strong track record in private equity fund selection. All funds managed or advised by SVGA continue to perform well, reporting positive valuation growth at the latest reporting date (30 September 2012) and in the case of the mature funds, return cash back to investors.
For further information please contact:
Charlotte Edgar - 0207 010 8922
Rebecca Hughes - 0207 010 8919
About SVG Advisers Limited
SVGA is a specialist private equity fund management and advisory business. It was established in 2001 to provide investors with innovative ways to access the private equity asset class. SVGA is a subsidiary of SVG Capital – an international private equity investor and fund management business listed on the London Stock Exchange (ticker: SVI).
SVGA has a strong track record of delivering private equity solutions for international investors and has funds and commitments under management1 and advice of €4.9 billion2. In addition to advising the board of SVG Capital on its investment portfolio, SVGA also advises eight diversified private equity fund of funds and five single manager funds, providing investors with tailored access to private equity.
SVGA has three offices in London, Boston and Sin gapore, offering ‘on the ground’ access to major private equity markets. The firm employs over 40 professionals across a broad range of complementary disciplines.
Further information about SVGA can be found at ww w.svgadvisers.com
About Aberdeen Asset Management PLC
Aberdeen is an asset management company managing Ł193.4 billion of third party assets from its offices around the world, as at 31 December 2012. Its clients access its investment expertise drawn from three main asset classes: equities, fixed income and property, as well as tailored solutions. It packages its skills in the form of segregated and pooled products across borders. It invests worldwide and follows a predominantly long-only approach, based on fundamentally sound investments.
Further information about Aberdeen can be found at www.aberdeen-asset.com
1 Including SVG Managers Limited
2 As at 31 December 2012