F&C Asset Management has entered into a conditional agreement to acquire Thames River Capital group for consideration of up to GBP53.6m.
The deal comprises of an initial consideration of GBP33.6m and conditional consideration of up to a further GBP20m payable in cash, loan notes and/or F&C shares.
Thames River will remain a fully autonomous unit within the F&C Group and will continue to be led by its CEO Charlie Porter.
F&C will acquire, through Thames River Capital (UK), an economic interest in the management fee profits and performance fee profits generated by the investment teams, which for the 11 month period ended February 28, 2010 amounted to approximately 40% in aggregate of those total profits.
F&C has also agreed terms under which its economic interest in the share of management fee profits of all of the investment teams can be increased over time.
Acquisition will exclude Nevsky Capital, a current associated undertaking of Thames River Capital. Prior to completion of the acquisition, Thames River Capital’s interest in Nevsky Capital will be demerged and will, thereafter, be directly held by the current Thames River Capital shareholders.
Alain Grisay, CEO of F&C, said: “We recently reported strong investment performance during 2009 and an improved outlook for fund flows. Indeed, we have separately announced this morning that our business saw net inflows during the first quarter and is trading in line with our expectations.
“Having made good progress with our core business, our focus now is to increase the momentum of our sales into higher fee margin products. I am therefore delighted to announce the acquisition of Thames River Capital, which we believe will accelerate the shift to higher fee margin products and enhance our distribution capabilities.”
Acquisition is anticipated to close in or before the third quarter of 2010.