Old Mutual U.S. Unit Buys $240 Million Landmark Partners Stakeby
OM Asset Management buying a 60% stake in private-equity firm
Deal will end some of OMAM’s liabilities to Old Mutual
Old Mutual Plc, the U.K. insurer splitting its business into four separate units, said its U.S.-based asset-management company is buying 60 percent of Landmark Partners Inc., a move that will end some of the unit’s liabilities to its London parent.
OM Asset Management Plc will pay about $240 million in cash for investment firm and may make an additional payment based on the growth of the business by 2018, the London-based insurer said in a statement on Tuesday. OMAM will pay for the unit from an existing credit facility or may seek other sources of debt financing, the company said. The transaction is expected to close in the third quarter.
The U.S. unit, which holds stakes in boutique asset-management firms, said it wants to expand. Parent Old Mutual said in March it will split the group into four separate units by 2018 because its assets have been undervalued. Apart from OMAM, Old Mutual also controls South Africa’s Nedbank Group Ltd., a U.K.-based wealth unit and Old Mutual Emerging Markets. OMAM trades in New York and Old Mutual may sell its stake in the company to pay down debt.
As part of the Landmark Partner’s deal, OMAM ended its so-called deferred tax asset deed and seed-capital management agreements with the parent, meaning liabilities to Old Mutual will be retired sooner than expected.