For $1.2B, Marty Flanagan Does It Again
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Thursday, September 28, 2017

For $1.2B, Marty Flanagan Does It Again

Marty Flanagan did it again — for the second time in 2017, he's signed a deal to buy another big ETF shop.

Flanagan confirms today that, as long rumored, Invesco [profile] has entered a definitive agreement to buy Guggenheim Investments' [profile] $36.7-billion ETF business for $1.2 billion in cash. The deal, expected to close in Q2 2018, would push Invesco to more than $196 billion in ETF AUM worldwide.

The price tag translates into about 3.3 percent of the Guggenheim ETF business' AUM and is in line with reports on the deal rumors over the past two months.

Flanagan, president and CEO of Invesco, points in particular to expanding his smart beta ETF suite and boosting scale as two of the benefits of the deal. Dan Draper, global head of ETFs at Invesco, also points to Guggenheim's BulletShares ETF line in particular, as well as to expanding their self-indexing capabilities and boosting key channel distribution.

For his part, Guggenheim Investments' new chief, Jerry Miller, calls the deal "an important step in [the firm's] growth strategy." He talks of focusing "on core strengths, including active portfolio management, across both ... institutional strategies and other retail businesses."

Citigroup Global Markets advised Guggenheim on the deal.

The Guggenheim deal is Flanagan's second ETF shop deal of 2017, as this spring he unveiled a deal to buy London-based Source. And Flanagan's ETF dealmaking at what is now Invesco goes all the way back to 2006 when the then-new CEO sealed a deal to buy PowerShares.

Guggenheim's ETF business was built out of several pieces over the years, including the old Claymore BulletShares ETF business and Rydex's ETF business. The Invesco deal follows Guggenheim's sale last year of a related back-office business, Rydex Fund Services.

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