Henderson Group Plc (HGG) agreed to buy U.S.-based Geneva Capital Management Ltd. from its founders, boosting the London money manager’s North American assets to $18.3 billion.
Henderson will pay as much as $200 million for the Milwaukee-based Geneva Capital, the U.K. company said in a statement today. The price includes an initial outlay of $130 million, a deferred revenue-linked payment of as much as $45 million and a final tranche of $25 million if Geneva meets its earnings targets over the next five years, Henderson said.
“We have been looking for a long time for the right partner on the ground in the U.S.,” Chief Executive Officer Andrew Formica said on a conference call with analysts. The acquisition will “take the U.S. to almost 15 percent of our total business, up from 10 percent today.”
Henderson joins a number of U.K.-based firms that have looked to North America for growth. Schroders Plc (SDR) bought STW Fixed Income Management LLC last year, and Legal & General Group Plc’s investment unit made its first U.S. acquisition in February, buying Global Index Advisors Inc.
Formica said the London-based firm had been looking to build up its U.S. institutional clients for some time, which today stands at about 12. Geneva Capital, which oversees about $6.3 billion in assets, has 20 to 30 institutional clients, he said.
Bill Priebe and Amy Croen co-founded the firm, which invests in mid- and small-capitalization U.S. equities, in 1987. Both signed long-term contracts to remain, according to the statement.
The acquisition is expected to add to earnings in the first full year and will be completed by October, Henderson said. The shares rose 0.3 percent to 237.3 pence at 12:20 p.m. in London, extending its gain this year to 3.8 percent.
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