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OLD MUTUAL PLC - OM Asset Management Acquires Majority Interest in Landmark Partners

Release Date: 14/06/2016 13:40
Code(s): OML     PDF:  
Wrap Text
OM Asset Management Acquires Majority Interest in Landmark Partners


       Old Mutual plc
       ISIN CODE: GB00B77J0862
       JSE SHARE CODE: OML
       NSX SHARE CODE: OLM
       ISSUER CODE: OLOMOL


       Ref 370/16
       14 June 2016
       OM ASSET MANAGEMENT ACQUIRES MAJORITY INTEREST IN LANDMARK
       PARTNERS
       OM Asset Management plc (“OMAM”), a majority-owned subsidiary of Old Mutual plc (“Old Mutual”),
       today announced that it will acquire a 60% equity interest in Landmark Partners (“Landmark”), a leading
       global secondary private equity, real estate and real asset investment firm.

       Separately, in order to advance the on-going separation of OMAM and Old Mutual plc, OMAM has
       negotiated an acceleration and subsequent termination of the Deferred Tax Asset Deed and Seed Capital
       Management Agreement with Old Mutual, the result of which is that OMAM’s on-going liabilities to Old
       Mutual under both agreements shall be satisfied earlier than expected.

       Bruce Hemphill, Group Chief Executive, said: “We welcome OMAM's delivery on its stated intent of
       acquiring value-enhancing and additive asset management capabilities in key growth classes. The
       amended arrangements for the deferred tax and seed assets are important steps in our relationship with
       OMAM. Old Mutual’s strategy is to support the growth of its four strong underlying businesses at the
       same time as progressing with the Managed Separation.”

       The following is the full OMAM announcement, which is also available on the OMAM website –
       http://ir.omam.com/investor-relations/news/


       “OMAM to Acquire Majority Interest in Landmark Partners


               Industry Leader in Global Secondary Private Equity, Real Estate and Real Asset
               Investments Will Broaden and Diversify OMAM’s Portfolio


       London – June 14, 2016 – OM Asset Management plc (NYSE: OMAM) today announced that it signed a
       definitive agreement to acquire a 60% equity interest in Landmark Partners, a leading, global secondary
       private equity, real estate and real asset investment firm. Under the terms of the purchase agreement,
       OMAM will pay approximately US$240 million in cash at closing with the potential for an additional
       payment based on the growth of the business through 2018. The overall investment is expected to result
       in a purchase multiple of 8-10x Economic Net Income (ENI)** generated by the Landmark transaction,
       prior to financing costs. OMAM intends to fund the closing payment using available capacity on its
       existing revolving credit facility or may seek alternative sources of debt financing depending on market
       conditions. OMAM expects the transaction to be up to 12% accretive to 2017 ENI per share. The
       transaction is expected to close in the third quarter of 2016.

       “Landmark Partners has built a dominant position in the secondary private equity, real estate and real
       asset space, having delivered close to three decades of excellent results for their clients,” said James J.
       Ritchie, OMAM’s Chairman. “Landmark fits comprehensively into our stated acquisition strategy,



       providing a leading platform in an increasingly important asset class, leveraging the strength of our global
       distribution group, expanding our range of active strategies for investors, and further diversifying our
       earnings base by broadening our participation in alternative investment strategies.”
       “Landmark is precisely the kind of industry leader with whom we seek to partner,” said Peter L. Bain,
       OMAM’s President and Chief Executive Officer. “The depth and breadth of their management team are
       exemplary and we look forward to collaborating with them to grow their existing product set and further
       diversify their business into emerging secondary asset classes. Our global distribution team is excited
       about bringing Landmark into certain domestic channels as well as new markets outside the U.S.
       Further, Landmark enhances the quality of our earnings through the stability of its committed capital-
       based revenue stream, and generates significant accretion to our ENI per share. In sum, we are
       delighted to partner with the team and look forward to working together to enhance the growth of their
       business.”

       Landmark has a strong track record of successful innovation in secondary private investments. The firm
       expanded from private equity secondary investments to include real estate in 1996 and real assets in
       2015. Landmark is distinguished by its long track record, proprietary transaction sourcing capabilities,
       and the competitive results it has generated for investors. Landmark has completed over 500
       transactions with committed capital of US$15.5 billion since its founding in 1989, and has acquired
       interests in over 1,900 partnerships, managed by over 700 general partners. The firm is led by its
       Managing Partners, Francisco L. Borges and Timothy L. Haviland, with a senior team averaging 17 years
       of experience with Landmark. The firm’s 89-member team operates through locations in Boston, London,
       New York, and Simsbury, Connecticut. Landmark’s global client base includes institutional investors in
       the United States, Canada, the United Kingdom, continental Europe, the Middle East, Asia and South
       America.

       “We are pleased to partner with OMAM,” said Francisco L. Borges, Managing Partner of Landmark.
       “OMAM’s partnership orientation combined with our management team’s retention of substantial equity in
       perpetuity, and ability to offer both growth capital and a strong, broad-based global distribution network
       were particularly attractive to us. We look forward to working with Peter and the team to continue to grow
       our business.”

       Separately, in order to advance the ongoing separation of OMAM and Old Mutual plc, OMAM has
       negotiated an acceleration and subsequent termination of the Deferred Tax Asset Deed and Seed Capital
       Management Agreement with Old Mutual, the result of which is that OMAM’s ongoing liabilities to Old
       Mutual under both agreements shall be satisfied earlier than expected.

          OMAM will host a conference call to discuss the transaction at 9:00 a.m. Eastern Time today.
           Participants may dial (877) 201-0168 (domestic) or (647) 788-4901 (international) and use the
        Conference ID 30514227. A link to the live audio webcast will be available at http://ir.omam.com.
        In addition, a copy of the presentation slides to be presented on the conference call are available
                                               at http://ir.omam.com.


                                                       Forward Looking Statements

        This press release includes forward-looking statements, as that term is used in the Private Securities Litigation
       Reform Act of 1995, including information relating to anticipated growth in revenues, margins or earnings, anticipated
       changes in OMAM’s business, anticipated future performance of OMAM’s business, anticipated future investment
       performance of OMAM’s Affiliates, expected future net cash flows, anticipated expense levels, changes in expense,
       the expected effects of acquisitions and expectations regarding market conditions. The words or phrases ‘‘will likely
       result,’’ ‘‘are expected to,’’ ‘‘will continue,’’ ‘‘is anticipated,’’ ‘‘can be,’’ ‘‘may be,’’ ‘‘aim to,’’ ‘‘may affect,’’ ‘‘may
       depend,’’ ‘‘intends,’’ ‘‘expects,’’ ‘‘believes,’’ ‘‘estimate,’’ ‘‘project,’’ and other similar expressions are intended to
       identify such forward-looking statements. Such statements are subject to various known and unknown risks and


       uncertainties and readers should be cautioned that any forward-looking information provided by or on behalf of
       OMAM is not a guarantee of future performance. Actual results may differ materially from those in forward-looking
       information as a result of various factors, some of which are beyond OMAM’s control, including but not limited to
       those discussed above and elsewhere in this press release and in OMAM’s most recent Annual Report on Form 10-
       K, filed with the Securities and Exchange Commission on March 15, 2016. Due to such risks and uncertainties and
       other factors, OMAM cautions each person receiving such forward-looking information not to place undue reliance on
       such statements. Further, such forward-looking statements speak only as of the date of this press release and
       OMAM undertakes no obligations to update any forward looking statement to reflect events or circumstances after
       the date of this press release or to reflect the occurrence of unanticipated events.



       Distribution activities conducted by OMAM outside of the United States are centralized through OMAM International
       Limited ("OMAM International"), an indirect wholly owned subsidiary of OM Asset Management plc. OMAM
       International is authorized and regulated by the United Kingdom's Financial Conduct Authority with FCA register
       number 515302.


       ** This press release references a non-GAAP performance measure referred to as economic net income (“ENI”).
       OMAM uses ENI to represent its view of the underlying economic earnings of the business. ENI is used to make
       resource allocation decisions, determine appropriate levels of investment or dividend payout, manage balance sheet
       leverage, determine Affiliate variable compensation and equity distributions, and incentivize management. OMAM’s
       ENI adjustments to U.S. GAAP include both reclassifications of U.S. GAAP revenue and expense items, as well as
       adjustments to U.S. GAAP results, primarily to exclude non-cash, non-economic expenses, or to reflect cash benefits
       not recognized under U.S. GAAP.



       For a further discussion of how OMAM uses ENI and why ENI is useful to investors, along with various U.S. GAAP to
       ENI reconciliations, refer to OMAM’s Quarterly Report on Form 10-Q filed on May 10, 2016 and Annual Report on
       Form 10-K filed on March 15, 2016.”


       Enquiries
       External communications
       Patrick Bowes                      UK       +44 20 7002 7440
       Investor relations
       Dominic Lagan                      UK       +44 20 7002 7190
       Sizwe Ndlovu                       SA       +27 11 217 1163

       Media
       William Baldwin-Charles                     +44 20 7002 7133
                                                   +44 7834 524833
       Notes to Editors
       Old Mutual provides investment, savings, insurance and banking services to 18.9 million customers in
       Africa, the Americas, Asia and Europe. Originating in South Africa in 1845, Old Mutual has been listed on
       the London and Johannesburg Stock Exchanges, among others, since 1999.
       In the year ended 31 December 2015, the Group reported adjusted operating profit before tax of £1.7
       billion and had £304 billion of funds under management from core operations (excluding Rogge).


       For further information on Old Mutual plc, please visit the corporate website at www.oldmutual.com
       Sponsor:

       Merrill Lynch South Africa (Pty) Ltd

       Joint Sponsor:
       Nedbank Capital






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