The Pendal Group Ltd (ASX: PDL) share price is frozen today at the company’s request.
This comes as the ASX-listed global investment manager announced a major acquisition before market opening today.
We take a look at the details, and Pendal’s newly released half year results, below.
What acquisition did Pendal announce this morning?
The Pendal share price is in a trading halt after the company reported it had entered into an agreement to acquire 100% of Thompson, Siegel & Walmsley LLC (TSW) for US$320 million (AU$413 million).
TSW is based in the United States and has US$23.6 billion of funds under management (FUM), mostly long-only equity.
Pendal believes the acquisition will be double-digit EPS accretive in the first full year following completion of the deal. Its consolidated FUM will increase to AU$132 billion (up 30%), with US client FUM increasing 112%.
TSW’s CEO, John Reifsnider, will be appointed CEO of Pendal’s merged US business.
Commenting on the acquisition, Pendal Group CEO, Nick Good said:
TSW is a natural strategic and cultural fit with Pendal and expands our successful diversified business model in the largest equity market in the world. TSW is highly complementary to Pendal’s US business, with almost no overlap of investment strategies and clients.
The acquisition will be funded with equity, debt and existing capital.
$190 million of equity will be raised through a fully underwritten Placement along with a Share Purchase Plan which will allow retail shareholders to participate. New shares will be issued at AU$6.80. That’s 7.4% below the current (frozen) $7.34 per share.
Highlights from the half year results
This morning Pendal also released its results for the half year ending 31 March.
The company reported a 64% increased in Statutory Net Profit After Tax (Statutory NPAT) from the prior corresponding period, with NPAT coming in at AU$89.9 million. Underlying Profit After Tax (UPAT) also increased, up 8% from the previous period to $82.6 million.
CEO Nick Good noted:
There was a notable improvement in investment performance with 83 per cent of Pendal’s FUM outperforming their benchmarks over the last 12 months, and J O Hambro Capital Management (JOHCM) performance fees were $41.1 million, up from $0.6 million in the prior year.
With our improving investment performance, increasingly positive investor sentiment, and the implementation of our multi-year strategic investment program, we are well placed to take advantage of the growth opportunities we see ahead.
Pendal share price snapshot
Shares remain in a trading halt at the time of writing but have gained 21% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) is up 31% in that same time.
Year-to-date, the Pendal share price is up 12%.