Principal Financial Group Inc · NASDAQ:PFG
Principal Financial — Merger or Acquisition (July 2006)
15 slides from Principal Financial's merger presentation, Jul 26, 2006
Slide 1: Acquisition of WM Advisors, Inc. Investor Presentation
Acquisition of WM Advisors, Inc. Investor Presentation July 2006 Copyright © 2006 Principal Financial Services, Inc. All rights reserved.
Slide 2: Participants
Participants J. Barry Griswell, Chairman and CEO Larry D. Zimpleman, President and COO James P. McCaughan, President, Global Asset Management Michael H. Gersie, Executive Vice President and CFO
Slide 3: Forward Looking Statements
Forward Looking Statements Certain statements made by the company which are not historical facts may be considered forward-looking statements, including, without limitation, statements as to sales targets, sales and earnings trends, and management’s beliefs, expectations, goals and opinions. These s
Slide 4: Transaction Overview
$740 million purchase price, subject to closing adjustments Acquiring $26 billion mutual fund business with significant third party distribution Core to strategy – capturing individual retirement assets Consistent with acquisition focus – growing U.S. and International asset accumulation and asset m
Slide 5: Transaction Overview: WM Advisors, Inc. (WMA)
Transaction Overview Manager of the WM Group of Funds $21 billion in mutual funds AUM, $5 billion in institutional AUM > 200 employees Successful third-party distribution model Leadership in target-risk funds Very good investment performance WM Advisors, Inc. (WMA) History of strong organic growth 3
Slide 6: Transaction Overview: WM Group of Funds and Distributor
Transaction Overview WM Group of Funds $21 billion in AUM 22 retail funds & 18 variable trust funds Broadly diversified across range of asset classes Strategic Asset Management (“SAM”) Portfolios, target-risk asset allocation funds WM Funds Distributor Distribution team 100+ strong Accomplished whol
Slide 7: Historical Perspective
Historical Perspective Strong track record of growth and performance Principal Mutual FundsSM as of 12/31/05, unless otherwise stated: 61%, 66% and 70% outperformed their Morningstar peer group median for the one-, three- and five-year periods.1 12th best selling mutual fund family as measured by ne
Slide 8: U.S. Retirement Assets
U.S. Retirement Assets $5.9 T $8.9 T $4.6 T ($ billions) Note: Excludes Union and Public pension funds Source: DOL, ICI, EBRI, and Cerulli Associates Strategic Rationale Emphasizing Mutual Fund Growth Principal Mutual Funds Are Key to Capturing the Growing Pool of Individual Retirement Assets… $- $1
Slide 9: Strategic Rationale
Strategic Rationale Transaction accelerates asset accumulation and asset management growth by: Increasing intermediary distribution capabilities to capture increasing flow of individual retirement assets Improving product suite overall Solidifying leadership in Lifecycle segment #4 combined rank, #4
Slide 10: Highlights of Combination
Highlights of Combination Creates $49 billion mutual fund complex Benefits of additional scale and presence Platform for accelerated growth Significant intermediary distribution expertise Significant expansion of firm level relationships Broader range of high-quality mutual funds offerings, broader
Slide 11: Terms and Financial Impact
Terms and Financial Impact $740 million in cash for 100% of the stock of WMA (subject to closing adjustments) Price represents 2.8% of assets under management Priced to deliver mid-teens IRR Financing expected through combination of excess capital and debt/hybrid issuance Estimated EPS impact No imp
Slide 12: Integration
Integration Closing expected fourth quarter 2006 Subject to regulatory and other approvals Integration detail Combining platforms – not an expense story Seamless to mutual fund shareholders and advisors Strong strategic and cultural fit
Slide 13: The Principal Going Forward
The Principal Going Forward Ongoing expansion of intermediary distribution to extend The Principal franchise Acceleration of strong organic growth achieved by mutual funds business Continued strong AUM growth* Total company AUM $205.3 billion, a 3-year CAGR of 21% Principal Global Investors3 AUM $16
Slide 14: Other Disclosures
Other Disclosures NASD/SEC disclosures Insurance products and plan administrative services are provided by Principal Life Insurance Company. Principal Investors Fund, Inc. is distributed by Princor Financial Services Corporation, 800-547-7754, member SIPC. Securities are offered through Princor® and
Slide 15: Other Disclosures
Other Disclosures Footnote 1 from page 7 Mutual funds outperform peer group medians when performance exceeds 50% of peers in their respective Morningstar categories. Analysis performed using the Class A performance of the Principal Investors Fund, Inc. and, where Class A performance was not availabl
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