Mr. Glen Williams reports
SPROTT TO ACQUIRE TOCQUEVILLE GOLD STRATEGIES
Sprott Inc.'s Sprott Asset Management LP (SAM) and Tocqueville Asset Management have entered into a definitive agreement regarding the acquisition by SAM of the Tocqueville gold strategies.
Sprott and Tocqueville Asset Management LP have entered into a definitive agreement regarding the sale of Tocqueville's gold strategy asset management business to Sprott Asset Management.
The Tocqueville gold investment team comprising senior portfolio manager John Hathaway and portfolio managers Douglas Groh and Ryan McIntyre will join Sprott Asset Management on closing.
Based on current asset levels, the transaction will potentially add $1.9-billion (U.S.) ($2.5-billion) (Canadian) to Sprott's assets under management (1).
The agreement contemplates the transfer to Sprott of the responsibility to manage or subadvise the gold strategies currently managed or subadvised by the Tocqueville gold investment team for various Tocqueville clients including the Tocqueville Gold Fund (TGLDX) and certain other institutional accounts.
Subject to security holder approval for certain acquired strategies, regulatory and stock exchange approvals and other customary conditions to closing, the transaction is currently expected to close in January, 2020.
"We are pleased to be acquiring Tocqueville's gold strategy asset management business," said Whitney George, president of Sprott. "John Hathaway and his team are among the world's most respected gold equities managers and we have enjoyed an excellent working relationship during the planning and launch of our joint venture over the past year. This transaction is a natural extension of that partnership, through which John will become a Sprott shareholder. We look forward to working closely together to serve our clients."
"We believe that this transaction is an excellent fit for our mutual fund shareholders and our clients," said Robert W. Kleinschmidt, president, chief executive officer and chief investment officer of Tocqueville. "It ensures us continued participation in the gold space, as well as access to the best investment talent and resources in the sector. We look forward to partnering with Sprott in this endeavour and to developing closer ties between the two firms in the future."
"Sprott has a globally recognized brand with a dedicated precious metals platform and a long history in the sector," said John Hathaway, senior portfolio manager of Tocqueville. "We share a similar world view and investment philosophy and believe our clients will benefit from access to Sprott's team of technical experts and investment professionals."
"Based on current asset levels, this transaction is expected to add $1.9-billion (U.S.) ($2.5-billion (Canadian)) in assets under management (AUM) to our managed equities platform," said Peter Grosskopf, chief executive officer of Sprott. "The addition of these strategies will complement our other resource investment and financing businesses, expand our global footprint and allow us to service clients in all major gold markets."
Additional details regarding the proposed transaction
The proposed transaction remains subject to security holder approval for certain acquired strategies, regulatory and stock exchange approvals, including listing approval of the Toronto Stock Exchange for the issuance of Sprott common shares to Tocqueville, and other customary conditions to closing, following which it would be expected to close in January, 2020.
In consideration for the acquisition of the Tocqueville gold strategies, Sprott will pay Tocqueville total consideration of up to $50-million (U.S.) comprising a payment at closing of $10-million (U.S.) in cash and Sprott common shares valued at $5-million (U.S.). Tocqueville will also be eligible to receive contingent consideration valued at up to an additional $30-million (U.S.) in cash and Sprott common shares valued at $5-million (U.S.), subject to the achievement of certain financial performance conditions over the two years following the closing of the proposed transaction. The terms and conditions of the definitive agreement are customary for transactions of this nature and Sprott will use cash on hand to finance the cash portion of the purchase price. Approval of Sprott shareholders will not be required.
About Sprott Inc.
Sprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the United States and Asia, Sprott is dedicated to providing investors with best-in-class investment strategies that include exchange-listed products, lending, managed equities and brokerage. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver, and its common shares are listed on the Toronto Stock Exchange under the symbol SII.
(1) As of Aug. 6, 2019.
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