The Perpetual Limited (ASX: PPT) share price won’t be going anywhere today after the fund manager requested a trading halt.
Why is the Perpetual share price in a trading halt?
Perpetual requested a trading halt this morning while it undertakes an equity raising to fund a major acquisition.
According to the release, Perpetual has entered into an agreement with BrightSphere Investment Group to acquire its 75% interest in Barrow Hanley for US$319 million (A$465 million).
Barrow Hanley is a diversified investment manager based in Dallas, Texas with funds under management (FUM) of approximately US$44.1 billion (A$63.9 billion) across 21 key strategies.
Its team invests with a value orientation across US equities, global equities, global emerging markets equities, and fixed income strategies.
Management notes that the acquisition is consistent with its strategy to build world-class investment and distribution capability and brings together two complementary investment management brands.
It is expected to more than triple Perpetual’s FUM from A$28.4 billion to A$92.3 billion and add 21 key new strategies across asset classes, strategies, and geographies.
On a pro forma basis, post the acquisitions of Barrow Hanley and Trillium (which completed on 30 June), Perpetual’s FUM will be comprised of 14% Australian equities, 48% US equities, 11% global equities, and 27% cash & fixed income.
Perpetual Chief Executive Officer and Managing Director, Rob Adams, commented: “This is a compelling acquisition. It provides Perpetual with world-class investment teams, diversifies our client base by sector and geography, and presents us with significant growth opportunities in the Australian market and a formidable platform to scale our business internationally.”
How is Perpetual funding the deal?
To fund the acquisition, Perpetual is launching a fully underwritten institutional placement of A$225 million at a fixed price of A$30.30 per share. This represents a 9.8% discount to its last close price.
It is also aiming to raise a further $40 million via an underwritten share purchase plan and has agreed a new debt facility of A$284 million (US$195 million) to cover the balance.
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