TIDMEMG
RNS Number : 0014A
Man Group plc
17 December 2014
Man Group plc Announces Acquisition of Silvermine Capital
Management LLC
NEW YORK and LONDON, 17 December 2014 -- Man Group plc ("Man
Group") announced today that it has entered into a conditional
agreement to acquire Silvermine Capital Management LLC
("Silvermine" or the "Company"), a Connecticut-based leveraged loan
manager with $3.8 billion of funds under management across nine
active collateralised loan obligation ("CLO") structures as of 30
November 2014 (the "Acquisition"). The Acquisition is expected to
complete in the first quarter of 2015, subject to certain approvals
being obtained.
Silvermine is wholly-owned by the firm's founders and senior
staff members and is based in Stamford, Connecticut. The team of 17
focuses exclusively on managing US levered credit portfolios and,
since inception in 2005, has executed 16 separate transactions
totalling $6.7 billion.
Upon completion of the Acquisition, Silvermine will be
integrated into Man GLG and will operate under the Man GLG
Silvermine name which will complement Man GLG's existing credit
business. Silvermine's team will remain in place under the
leadership of two of the firm's founders, G. Steven Kalin and
Richard F. Kurth, who will continue to work alongside the other
co-founders Aaron Meyer and Jonathan Marks.
The Acquisition follows Man Group's recent acquisitions in the
US of Pine Grove Asset Management LLC, Numeric Holdings LLC and the
Merrill Lynch Alternative Investments LLC fund of hedge fund
portfolio. The strategic rationale for the Acquisition
includes:
-- Integration of Silvermine's specialised and high calibre team
into Man Group, with long-term experience and expertise in US
levered credit;
-- Significant enhancement of Man Group's existing US credit
business and global CLO footprint, providing the necessary scale to
become a significant player in the US CLO market;
-- Further expansion of Man Group's footprint in the US,
utilising Silvermine's distinct distribution channel through
investment banks, and adding to the firm's investment capabilities;
and
-- Opportunity for the new Man GLG Silvermine business to
leverage Man Group's infrastructure, banking relationships,
distribution capabilities, and balance sheet.
The consideration paid by Man Group is structured to align its
interests with Silvermine and comprises:
-- An upfront payment of $23.5 million, paid in cash from
existing resources upon completion of the transaction;
-- Two earn out payments, payable following the first and fifth
anniversary of closing, on a sliding scale dependent on levels of
run rate management fees at the time:
o After one year, up to $16.5 million; and
o After five years, up to $30 million.
-- The earn out payments are expected to be paid in cash, also
funded from Man Group's resources at the time; however Man Group
has retained the right to, at its discretion, issue ordinary shares
at the then prevailing market price in order to satisfy some or all
of the consideration payable.
The regulatory capital requirement associated with the
Acquisition is expected to be approximately $45 million. As of 30
November 2014, Silvermine's run rate management fee revenues and
PBT were $17 million and $8 million respectively, based on $3.8
billion in funds under management.
Mark Jones, co-CEO of Man GLG, stated, "The acquisition of
Silvermine will transform our existing credit business and position
us to benefit from strong demand for US CLOs and other credit
strategies. Silvermine is a highly respected, specialised business
with an excellent track record of outperformance. As part of Man
Group, Silvermine will benefit from our world class infrastructure,
distribution and access to capital and we are confident that this
acquisition will bring meaningful advantages to our investors by
further diversifying our offering."
Steven Kalin and Richard Kurth, Managing Directors of
Silvermine, commented, "We're excited about the opportunities that
joining Man Group will bring to us and to our investors. We have
always been focused on identifying opportunities in the credit
space that, given their risk/return proposition, deliver attractive
performance for our clients. We are pleased to be joining forces
with an organisation that not only embraces our firm's
entrepreneurial spirit, but plans to help foster that spirit and
collaborate with us to further grow the business".
Berkshire Capital Securities LLC is acting as financial adviser
to Silvermine.
Enquiries:
Fiona Smart
Head of Investor Relations
+44 20 7144 2030
fiona.smart@man.com
Rosanna Konarzewski
Global Head of Communications
+44 20 7144 2078
media@man.com
Finsbury (UK enquiries)
James Bradley/Michael Turner
+44 207 251 3801
ManGroupUK@Finsbury.com
Prosek Partners (US enquiries)
Brian Schaffer/Caroline Harris-Gibson
+1 212 279 3115
bschaffer@prosek.com/cgibson@prosek.com
Notes to editors:
About Man Group
Man Group is a leading investment management business with a
diverse offering in hedge funds and long only products across
equity, credit, managed futures, convertibles, emerging markets,
global macro and multi-manager solutions. At 30 September 2014, Man
Group's funds under management were $72.3 billion. The original
business was founded in 1783. Today, Man Group is listed on the
London Stock Exchange and is a constituent of the FTSE 250 Index
with a market capitalisation of around GBP2.6 billion. Man Group
also supports many awards, charities and initiatives around the
world, including sponsorship of the Man Booker literary prizes.
Further information can be found at www.man.com.
About Man GLG
Man GLG, a wholly owned subsidiary of Man Group (since 14
October 2010), is a global asset management company offering its
clients a wide range of performance-oriented investment products
and managed account services. Founded in 1995, Man GLG is dedicated
to achieving consistent, attractive investment returns through
traditional, alternative and hybrid investment strategies. Man GLG
currently manages $32.2 billion.
The performance Man GLG generates for its clients is driven by
the proven expertise of its team of investment professionals
underpinned by a rigorous approach to investment analysis and a
strong focus on risk management. Man GLG has been investing in
credit and convertible strategies for over 15 years. Steve Roth
heads the Man GLG Global Credit team which is an established
business, with $7 billion of funds under management. The absolute
return strategy incorporates a diverse range of approaches and
asset classes including relative value, distressed debt, event
driven capital structure arbitrage and convertible bond arbitrage
strategies. The long-only credit strategies include investing in
corporate bonds, convertible bonds and asset-backed securities with
a range of approaches applied to each.
About Silvermine
Founded in 2005, Silvermine is a SEC registered investment
advisor with, as of 30 November 2014, approximately $3.8 billion in
assets under management focused on high yield credit. The founding
team has worked together for over 10 years using primarily senior
secured loans as the basis to express their views through a variety
of credit products. Since inception, the Company has executed 16
separate transactions totalling $6.7 billion. At 31 December 2013,
Silvermine had gross balance sheet assets of $24.5 million and
profit before tax attributable to these assets of $11.6
million.
Forward-looking statements and other important information
This document contains forward-looking statements with respect
to the financial condition, results and business of Man Group plc.
By their nature, forward looking statements involve risk and
uncertainty and there may be subsequent variations to estimates.
Man Group plc's actual future results may differ materially from
the results expressed or implied in these forward-looking
statements.
The content of the website referred to in this announcement is
not incorporated into and does not form part of this
announcement.
Nothing in this announcement should be construed as or is
intended to be a solicitation for or an offer to provide investment
advisory services.
Nothing in this announcement is intended to be a profit forecast
or a profit estimate for any period or a forecast of future profits
and statements relating to earnings accretion or enhancement should
not be interpreted to mean that earnings per Man ordinary share for
the current or future financial periods will necessarily match or
exceed its historical published earnings per share.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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