Franklin Templeton will acquire Putnam from Great-West, in exchange for around 33.33 million Franklin Resources shares worth around $825m, and $100m in cash 180 days after closing, along with up to $375m in contingent consideration
Franklin Parkway in San Mateo, California. (Credit: Coolcaesar/Wikipedia)
US-based investment management firm Franklin Resources, operating as Franklin Templeton, is set to acquire Putnam Investments for around $925m.
The company has announced a strategic partnership with Power Corporation of Canada (Power) and Great-West Lifeco (Great-West).
Under the terms of the agreement, Franklin Templeton will acquire Putnam from Great-West, in exchange for around 33.33 million of its shares worth around $825m, paid at closing, and $100m in cash, 180 days after closing.
In addition, Franklin Templeton will pay Great-West up to $375m contingent on achieving revenue growth targets from the partnership.
Great-West will become a long-term shareholder in Franklin Resources, obtaining a nearly 6.2% stake, in line with its continuing asset management commitment.
The company will initially allocate $25bn to Franklin Templeton’s specialist investment managers within 12 months of closing, with plans to increase the amount over a few years.
The transaction is expected to be completed in the fourth calendar quarter of this year, subject to customary closing conditions.
Franklin Templeton said that the partnership is in line with its focus to further enhance its insurance client assets, and widen its relationship with Power Group of Companies.
Franklin Templeton president and CEO Jenny Johnson said: “This is a compelling transaction for Franklin Templeton, and we are excited about the numerous opportunities that will be unlocked by this long-term strategic partnership with the Power Group of Companies including Great-West.
“Power and Great-West are global leaders across financial services, particularly in the wealth, insurance and retirement channels.
“With outstanding investment performance, Putnam will add complementary capabilities to our existing specialist investment managers to meet the varied needs of our clients and will increase Franklin Templeton’s defined contribution AUM.”
Great-West and IGM Financial (IGM), a part of the Power Group of Companies, are engaged in the global insurance, retirement, asset management and wealth management sectors.
The two companies accumulated about $2.1 trillion in assets under management or administration (AUM/AUA).
Great-West constitutes insurance companies Empower in the US, Canada Life in Canada, and Irish Life in Europe.
IGM has subsidiaries Mackenzie Financial and IG Wealth Management, along with investments in Rockefeller Capital Management and China Asset Management Co.
Established in 1937, Putnam is a global asset management firm, with offices in Boston, London, Munich, Tokyo, Singapore, and Sydney, and has $136bn in AUM as of April 2023.
Franklin Templeton said that the transaction is structured to maintain its financial flexibility and enhance continued investment across the firm.
Also, the execution plan is designed to minimise disruption to Putnam’s investment teams and client relationships, said the investment management firm.
Ardea Partners served as lead financial advisor, Broadhaven Capital Partners as financial advisors, and Willkie Farr & Gallagher as legal counsel to Franklin Templeton, on this deal.
Great-West chair, Power president and CEO of R Jeffrey Orr said: “Franklin Templeton is a leading global asset management firm, whose business model is well-positioned to build upon the investment and distribution strengths of Putnam.
“We are pleased to enter a partnership with Franklin Templeton that will be mutually beneficial to clients and our respective businesses.”