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Victory Capital (VCTR) Agrees to Acquire WestEnd Advisors
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Victory Capital Holdings, Inc. (VCTR - Free Report) has agreed to acquire 100% of WestEnd Advisors, LLC. The deal, expected to close before the end of 2021, will likely be immediately accretive to earnings per share.
Per the deal, Victory Capital will make an upfront payment of $480 million at closing, with deferred earn-out payments over a number of years upon the satisfaction of certain revenue growth targets.
Pro forma, adjusted net income accretion with a tax benefit of 9% is expected in 2022.
The acquisition brings in a new dimension of growth and diversification for Victory Capital. Post completion, WestEnd will become Victory Capital’s 12th investment franchise.
Notably, WestEnd provides financial advisors with turnkey, core model allocation strategies serving as holistic solutions and complementary sources of alpha. It has nearly $18 billion in assets, and offers four primary exchange traded fund (ETF) strategies and one large-cap core strategy, all in tax-efficient separately managed account (SMA) structures.
The chairman and CEO of Victory Capital, David Brown, stated, “The acquisition of WestEnd Advisors is very strategic and transformational to our business. It adds a high-quality and proven investment platform as well as a new product capability in a fast-growing market segment.”
Brown added, “WestEnd is a leader in the third-party ETF model space and, through the first three quarters of 2021, generated $3.5 billion, or 30%, net organic growth in assets. With our strong presence on major financial intermediary platforms and the wide geographic reach of our distribution coverage, we believe we are well-positioned to continue WestEnd’s growth. Longer-term, we see exciting potential to launch new products and make new solutions available to a growing client base.”
Michael Goldman, the managing partner of WestEnd, commented, “WestEnd has grown quickly as an independent company and we believe we can continue that growth by joining forces with the right partner. Victory Capital aligns culturally with WestEnd. They also possess the requisite scale and well-established distribution network to be additive to our existing distribution activities and should serve as a catalyst for future growth.”
Notably, BofA Securities, a unit of Bank of America (BAC - Free Report) , has been serving as the financial advisor to Victory Capital. It has also provided committed financing for the deal.
Over the past six months, shares of Victory Capital have gained 34.3% compared with 1.9% growth recorded by the industry.
Several companies from the finance sector are undertaking consolidation efforts to counter low interest rates and heightened costs of investments in technology, and diversify revenues and products.
Last month, with an aim to further diversify its deposit gathering capabilities and revenue mix, Raymond James (RJF - Free Report) announced a cash-cum-stock deal to acquire TriState Capital Holdings, Inc. .
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Victory Capital (VCTR) Agrees to Acquire WestEnd Advisors
Victory Capital Holdings, Inc. (VCTR - Free Report) has agreed to acquire 100% of WestEnd Advisors, LLC. The deal, expected to close before the end of 2021, will likely be immediately accretive to earnings per share.
Per the deal, Victory Capital will make an upfront payment of $480 million at closing, with deferred earn-out payments over a number of years upon the satisfaction of certain revenue growth targets.
Pro forma, adjusted net income accretion with a tax benefit of 9% is expected in 2022.
The acquisition brings in a new dimension of growth and diversification for Victory Capital. Post completion, WestEnd will become Victory Capital’s 12th investment franchise.
Notably, WestEnd provides financial advisors with turnkey, core model allocation strategies serving as holistic solutions and complementary sources of alpha. It has nearly $18 billion in assets, and offers four primary exchange traded fund (ETF) strategies and one large-cap core strategy, all in tax-efficient separately managed account (SMA) structures.
The chairman and CEO of Victory Capital, David Brown, stated, “The acquisition of WestEnd Advisors is very strategic and transformational to our business. It adds a high-quality and proven investment platform as well as a new product capability in a fast-growing market segment.”
Brown added, “WestEnd is a leader in the third-party ETF model space and, through the first three quarters of 2021, generated $3.5 billion, or 30%, net organic growth in assets. With our strong presence on major financial intermediary platforms and the wide geographic reach of our distribution coverage, we believe we are well-positioned to continue WestEnd’s growth. Longer-term, we see exciting potential to launch new products and make new solutions available to a growing client base.”
Michael Goldman, the managing partner of WestEnd, commented, “WestEnd has grown quickly as an independent company and we believe we can continue that growth by joining forces with the right partner. Victory Capital aligns culturally with WestEnd. They also possess the requisite scale and well-established distribution network to be additive to our existing distribution activities and should serve as a catalyst for future growth.”
Notably, BofA Securities, a unit of Bank of America (BAC - Free Report) , has been serving as the financial advisor to Victory Capital. It has also provided committed financing for the deal.
Over the past six months, shares of Victory Capital have gained 34.3% compared with 1.9% growth recorded by the industry.
Currently, the company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Several companies from the finance sector are undertaking consolidation efforts to counter low interest rates and heightened costs of investments in technology, and diversify revenues and products.
Last month, with an aim to further diversify its deposit gathering capabilities and revenue mix, Raymond James (RJF - Free Report) announced a cash-cum-stock deal to acquire TriState Capital Holdings, Inc. .