AGF Management Limited (AGF) Provides Update on Smith & Williamson Prospective Merger
We are pleased with the revised structure of the proposed merger, which allows us to realize the value of our long-term investment in Smith & Williamson.
TORONTO, June 01, 2020 (GLOBE NEWSWIRE) -- Further to the announcement made April 15, 2020, AGF Management Limited (TSX:AGF.B) confirms today that a revised transaction structure has been agreed for the proposed merger between Tilney and Smith & Williamson to create one of the U.K.’s leading integrated wealth management and professional services group.
The revised transaction structure includes a material new equity investment from funds advised by Warburg Pincus LLC, and a new optimized capital structure for the combined group which has resulted in a lower level of debt.
“We are pleased with the revised structure of the proposed merger, which allows us to realize the value of our long-term investment in Smith & Williamson. The extraordinary circumstances created by the COVID-19 pandemic and the resulting economic and valuation impacts are addressed by the revised terms and we believe the structure will meet the points raised by the regulators,” said Kevin McCreadie, Chief Executive Officer and Chief Investment Officer, AGF.
The revised transaction structure will require approval by the relevant regulators, antitrust authorities and Smith & Williamson shareholders. Allowing for the process of receiving these approvals in the current environment, the transaction is anticipated to close in the second half of 2020.
Based on the terms of the revised transaction structure, AGF estimates that it will receive total cash of approximately £176.5 million (approximately C$300.1 million), excluding tax and one-time expenses and subject to closing adjustments. Total cash includes dividends and distributions of up to £27.8 million (C$47.3 million) comprised of – an interim dividend of £2.7 million (C$4.5 million) that was received on February 7, 2020, an interim dividend of £5.3 million (C$9.1 million) payable on June 26, 2020 and, immediately before closing, an estimated special distribution of £19.8 million (approximately C$33.7 million). On closing, AGF is expected to receive cash proceeds of approximately £148.7 million (approximately C$252.8 million) compared to an estimated book value at closing of C$149.4 million. Not included in the total cash are further distributions of £0.7 million per month, beginning September 1, 2020, in the event that the transaction has not completed.
In the revised transaction structure, AGF will no longer retain any equity consideration in the merged group.
“As previously shared, the completion of this transaction will give us the flexibility to redeploy capital in a number of ways, including funding future share buybacks, servicing debt repayment and continuing to invest in new areas of growth ensuring our resources remain focused against our stated strategic goals and delivering continued value for our shareholders,” added McCreadie.
The original terms of the proposed merger were stated previously in a press release by AGF on September 19, 2019 and further updates were provided on January 20, 2020, February 7, 2020 and April 15, 2020.
All Canadian dollar figures assume an exchange rate of 1.70.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
AGF has investment operations and client servicing teams on the ground in North America, Europe and Asia. With over $36 billion in total assets under management, AGF serves more than one million investors. AGF trades on the Toronto Stock Exchange under the symbol AGF.B.
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