Victory Capital Acquires First Eagle for $7 Billion
(Bloomberg) — Victory Capital Holdings Inc. agreed to buy First Eagle Investments in a deal that would propel the combined firm’s assets under management to about $571 billion.
San Antonio-based Victory will pay about $7 billion to acquire First Eagle, including $4 billion in cash and $2 billion in newly issued shares, according to a statement Wednesday. The terms also include the assumption of $575 million of First Eagle’s senior secured notes that are due in 2032.
The transaction is part of a wave of consolidation in the asset-management industry, where managers are seeking to broaden their offerings and racing to build scale in the face of a fee squeeze. First Eagle, which manages about $229 billion, will add scaled CLO and alternative credit to Victory’s multi-asset products.
Victory’s clients will have “access to a broader set of investment capabilities and deeper resources, and our shareholders benefit from the enhanced scale and earnings power of the combined company,” Chairman and Chief Executive Officer David Brown said in the statement.
The deal comes five months after Victory Capital withdrew a nearly $9 billion proposal to acquire Janus Henderson Group Plc, ending a brief bidding war. Victory had accused Janus of not engaging with its offer and instead opting for what it called an inferior one from Trian Fund Management and General Catalyst. Investment teams overseeing the majority of Janus Henderson’s assets had expressed opposition to Victory’s bid.
Read More: Victory Capital Pulls Janus Offer, Ending Fierce Bidding War
First Eagle will operate on Victory Capital’s platform and retain its brand, according to the statement. First Eagle’s $41 billion CLO and alternative credit platform will serve as the combined company’s alternative investments platform after the deal is completed.
The combined company will have annual revenue of roughly $3.2 billion, and the deal will generate about $280 million of net expense synergies, the companies said.
PJT Partners was the lead financial adviser to Victory Capital and Willkie Farr & Gallagher was legal adviser. UBS Investment Bank advised First Eagle while Ropes and Gray was legal adviser.
