Mr. Abe Goenka reports
NATIXIS GLOBAL ASSET MANAGEMENT TO PURCHASE NEXGEN FINANCIAL FOR CA$7.25 PER SHARE
NexGen Financial
Corp. and a
wholly owned subsidiary of Natixis Global Asset Management S.A. have entered into an agreement in
which Natixis will acquire all of the outstanding common shares of
NexGen for consideration consisting of $7.25 cash per common share,
for an enterprise value of approximately $35-million.
The $7.25 price per share represents a 107-per-cent premium to NexGen's
closing share price of $3.50 on Oct. 23, 2014, the last trading day
before the announcement of the transaction.
NexGen is a Toronto-based asset manager with more than $919-million
(as of Sept. 30, 2014) in assets under management and a broad
distribution platform.
Rationale for the transaction
"NexGen is an innovative firm with a strong management team and a solid
lineup of retail mutual funds offered through an expansive distribution
platform," said John Hailer, chief executive officer of Natixis in the
Americas and Asia. "We are honoured to build on the legacy James Hunter
established in one of the largest retail markets in the world. Together
with NexGen, we will be better positioned to serve the market with our
worldwide network of affiliated investment managers."
Natixis manages more than $930-billion (as of June 30, 2014) in assets
through its global affiliates and was selected as the top U.S. mutual
fund family based on an evaluation of 2013 performance, according to the
annual Barron's/Lipper ranking of U.S. mutual fund families. The
firm is headquartered in Paris and Boston, with offices around the world.
Natixis plans to build upon NexGen's existing mutual fund platform by
selectively offering its broad range of asset management strategies into
the Canadian retail market.
"We are very pleased to join one of the world's leading asset managers,"
said Abe Goenka, NexGen co-chief executive officer. "It's exciting to become part of an
organization with significant resources and an outstanding group of
affiliated asset managers. This gives us greater access to a broad set
of investment strategies that will allow us to create new products
adding to our already diverse fund offerings, allowing us to better
serve current clients and pursue new opportunities."
Expanding into Canada is part of Natixis's plan to actively
pursue international growth. In June, the firm announced plans to launch
a new business development initiative in Canada focused on tapping into
the steadily growing Canadian institutional market. In 2013, the firm
established its retail platform in the United Kingdom, adding personnel and
launching several mutual funds registered for the U.K.
NexGen is recognized for offering tax-efficient wealth management
strategies. Its patent-pending proprietary mutual fund structure is
designed to achieve a number of tax-planning objectives that are not
publicly offered by any other Canadian mutual fund company. The firm
distributes through more than 1,600 financial advisers and more than 100
dealers throughout Canada.
Transaction details
The transaction will be completed by way of a statutory plan of
arrangement pursuant to the Business Corporations Act (Ontario). Upon
receipt of the unanimous recommendation of the special committee of
independent directors, the NexGen board approved the transaction and has
resolved to recommend that NexGen shareholders vote in favour of the
transaction at a special meeting of the shareholders to approve the
transaction. Blair Franklin Capital Partners Inc. has provided an
opinion to the NexGen board of directors and special committee that, as
of Oct. 24, 2014, the consideration under the proposed transaction is
fair, from a financial point of view, to NexGen's shareholders.
Completion of the transaction is subject to customary closing
conditions, including Ontario court approvals, a favourable vote of at
least two-thirds of the votes cast by NexGen shareholders and applicable
regulatory approvals.
In connection with the execution of the arrangement agreement,
shareholders who collectively own over 50 per cent of NexGen's issued and
outstanding common shares have entered into agreements with Natixis
pursuant to which they have agreed, among other things, that they will
vote all of their NexGen common shares in favour of the transaction,
unless the arrangement agreement is terminated in certain circumstances.
The arrangement agreement includes customary non-solicitation provisions
applicable to NexGen and provides for the payment of a $1.75-million
breakup fee to Natixis if the transaction is terminated in certain
circumstances.
NexGen will seek approval for the transaction from its shareholders at a
special meeting, which it expects will be held close to year-end. In
connection with the meeting, NexGen will mail an information circular to
its shareholders providing further details of the transaction.
The proposed transaction will constitute a change of control of NexGen
Financial Limited Partnership, the manager of the NexGen mutual funds,
and investors in the NexGen funds will be sent notice of the change of
control.
In keeping with the Natixis multiaffiliate business model, NexGen will
operate autonomously with the existing senior management team. There are
no immediate plans to make staffing changes or changes to the NexGen
business model.
Assuming timely receipt of all necessary court, shareholder and
regulatory approvals and the satisfaction of all other conditions,
closing is expected to occur in January, 2015.
Advisers
Blair Franklin Capital Partners Inc. is acting as financial adviser to
NexGen, and Goodmans LLP is acting as legal counsel to NexGen.
Borden Ladner Gervais LLP is acting as legal counsel to Natixis.
About Natixis Global Asset Management
Natixis Global Asset Management is a multiaffiliate organization
that offers a single point of access to more than 20 specialized
investment firms in the United States, Europe and Asia. The firm ranks among the
world's largest asset managers.
Headquartered in Paris and Boston, Natixis Global Asset Management's assets under management totalled $930.5-billion as of June 30, 2014.
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