Business
Acquisition
Acquisition.
About this update from Ashmore Group Plc
[{"type":"text","content":"\n \n\n\n\n\n\nRNS Number : 7611B Ashmore Group PLC 24 February 2011 \n\nAshmore Group plc\n24 February 2011\n \n \nProposed acquisition of a majority interest in Emerging Markets Management, L.L.C.\n \n \nAshmore Group plc (\"Ashmore\"), a leading specialist emerging markets investment manager, announces that it has entered into a conditional agreement to acquire a 62.9 per cent stake in Emerging Markets Management, L.L.C. (\"EMM\") (the \"Acquisition\"). \n \nEMM is a long-established US-based investment management firm with approximately US$10.4 billion of assets under management (\"AuM\") as at 31 January 2011. Founded in 1987, EMM has earned a reputation as one of the world's pioneering investment firms specialising in the management of emerging markets equities. \n \nAcquisition Highlights\n \n§ In line with Ashmore's strategy to grow its equity investment theme, the equity theme will represent approximately 20% of the combined AuM\n§ Diversifies and adds scale to Ashmore's existing product offering and revenue streams \n§ Complementary business and culture to Ashmore, with no change to existing EMM investment process\n§ Increased ongoing EMM employee ownership \n§ Significant deferred consideration element aligns interests of clients, employees and shareholders\n§ EMM management, investment professionals and employees to be retained\n§ Expands and diversifies client base by geography and client type\n§ Existing arrangements with Amundi in relation to the distribution of EMM products to remain in place\n§ Potential for further value upside, particularly through distribution\n§ Acquisition expected to be immediately earnings enhancing\n \nAcquisition Structure\n \nTotal consideration up to US$246.0 million consisting of:\n§ Initial consideration of US$96.0 million payable in cash on completion of the Acquisition (\"Completion\") and US$29.9 million in new ordinary Ashmore shares, or approximately 5.1 million shares, which will be restricted from sale for a period of up to three years post-Completion; and\n§ Earn-out consideration of up to a maximum of US$120.1 million payable in three annual instalments based on the achievement of certain financial targets over the three years following Completion. Earn-out consideration will be payable in a combination of cash and new Ashm...