Jupiter Fund Management has proposed to acquire Merian Global Investors for £370 million ($476.5 million), in a deal that will boost its fixed-income and emerging markets capabilities.
A joint news release said the deal, which is expected to complete July 1, will add £22.4 billion to Jupiter's AUM, creating an enlarged group with combined assets under management of £65.2 billion. The firm will operate as Jupiter.
The 100% acquisition will be financed through the issue of new Jupiter shares to Merian shareholders. Following completion of the deal Merian's largest shareholder, TA Associates Management, will own about 16% of the enlarged firm and key Merian management will own about 1%.
While a sales and purchase agreement has been signed, a Merian spokeswoman said the deal is subject to Jupiter shareholder and regulatory approval.
The acquisition will diversify Jupiter's business by expanding its £11.7 billion fixed-income capability and building on its £2.4 billion global emerging markets capability, showed a Jupiter presentation document on the deal. Jupiter's £38 billion retail business will also be bolstered by Merian's £20.2 billion in retail assets under management.
Merian's investment team will join Jupiter, according to the release. A Jupiter spokeswoman said Jupiter's executive committee will remain as it is. The board will also stay the same but with the addition of a Merian shareholder, to be nominated by TA Associates.
"The addition of Merian is compelling for all stakeholders. With this acquisition, our business will benefit from an increased capacity to attract, develop and retain high quality talent, backed by further investment in our platform and technology. In turn, we will be able to offer a wider choice of strongly performing active investment strategies to our clients, while shareholders will benefit from a highly earnings accretive deal delivered through substantial cost synergies," Andrew Formica, CEO of Jupiter, said in the news release.
Mark Gregory, CEO of Merian, added in the release: "Jupiter is a great strategic and cultural fit with our business. It has a market leading brand with a clear focus on high conviction, active asset management which is entirely consistent with our own. I believe the enlarged business will be more strongly positioned to offer greater choice and investment performance to clients and continue to meet clients' ever-evolving needs."
Jupiter's board was advised by Fenchurch Advisory Partners and J.P. Morgan Cazenove. Merian was advised by law firms Travers Smith LLP and Macfarlanes LLP.
