has agreed to sell Delaware International Advisers Ltd. (DIAL), its international investment unit, to DIAL managers and private equity firm Hellman & Friedman
for $172 million in cash and $27 million in assumed obligations. Delaware expects $46 million after taxes as a result of the sale.
DIAL contributed $3.5 million to Delaware's first quarter earnings.
, DIAL's current managing director and chief investment officer, will head the new company. Ninety London-based employees will continue to work for the new company, and 14 Philadelphia-based employees providing client services, marketing and consultant relations support to DIAL will be offered jobs by the new company.
Prior to the sale, DIAL managed $26 billion in assets; $19 billion in institutional assets will move with the company and $7 billion in retail assets will remain managed by Delaware, said spokesman Tom Gariepy. Delaware plans on recommending DIAL as a subadvisor to the retail assets to its boards. Delaware Investments managed $110 billion in assets as of March 31, 2004.
"[T]hrough subadvisory arrangements, we look forward to maintaining an ongoing relationship with those managers" said Jude T. Driscoll, Delaware chief executive officer.
"DIAL has always been a part of Delaware that has been geographically separate…[and] had operational independence…this is a group that has always valued its independence and expressed a desire to grow by increasing their independence" said Gariepy. Through the sale, "we are compensated for their leaving, our clients are served, and they get the independence they want" added Gariepy.
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