Former Westpac-controlled investment manager Pendal has announced it will take over US-based value manager Thompson, Siegel & Walmsley (TSW) in a $US320 million ($413 million) deal, as it reports its half-year results which saw higher revenue, earnings and dividend.
Pendal is launching a $190 million capital raising by issuing 27.9 million new shares and a share purchase plan that will kick off next Monday, May 17, in order to fund the acquisition.
The new shares will be issued at $6.80, a small discount to the $7.34 closing price last Friday. The rest of the purchase price will be funded through debt and some cash on hand.
Once the deal is completed, Pendal’s total assets under management will jump 30% to $132 billion. Pendal said TSW’s chief executive John Reifsnider will be appointed CEO of Pendal’s combined US business.
In its half-year results Pendal reported statutory profits up 64% to $89.9 million and a 13% lift in interim dividend to 17 cents a share.
Pendal CEO Nick Good said in Monday’s statement that the “robust result” was due to increasingly positive investor sentiment and improved markets performance, adding the group will continue to expand internationally by establishing a European office during the next half.
“After successfully expanding our global presence in the past decade, especially in the US and UK, we have committed to a multi-year strategy to deliver longterm sustainable FUM and earnings growth,” Mr Good said.
“The acquisition of TSW, announced today, accelerates this strategy and expands our successful diversified business model in the largest equity market in the world.”
Pendal shares were halted on Monday to allow the first part of the fund raising to take place.
