BOSTON & TORONTO--(BUSINESS WIRE)--Natixis Global Asset Management (Natixis) and NexGen Financial Corporation (NexGen) (NFX:TSX.V) announced today that NexGen and a wholly-owned subsidiary of Natixis have entered into an agreement in which Natixis will acquire all of the outstanding common shares of NexGen for consideration consisting of CA$7.25 cash per common share, for an enterprise value of approximately CA$35 million.
The CA$7.25 price per share represents a 107% premium to NexGen's closing share price of CA$3.50 on October 23, 2014, the last trading day before announcement of the transaction.
NexGen is a Toronto-based asset manager with more than CA$919 million (as of Sept. 30, 2014) in assets under management and a broad distribution platform.
Rationale for the Transaction
“NexGen is an innovative firm with a strong management team and a solid lineup of retail mutual funds offered through an expansive distribution platform,” said John Hailer, chief executive officer of Natixis in the Americas and Asia. “We are honored to build on the legacy James Hunter established in one of the largest retail markets in the world. Together with NexGen, we will be better positioned to serve the market with our worldwide network of affiliated investment managers.”
Natixis manages more than $930 billion (as of June 30, 2014) in assets through its global affiliates and was selected as the top U.S. mutual fund family based on an evaluation of 2013 performance, according to the annual Barron’s/Lipper ranking of U.S. mutual fund families. The firm is headquartered in Paris and Boston with offices around the world. Natixis plans to build upon NexGen’s existing mutual fund platform by selectively offering its broad range of asset management strategies into the Canadian retail market.
"We are very pleased to join one of the world’s leading asset managers," said Abe Goenka, NexGen co-CEO. "It’s exciting to become part of an organization with significant resources and an outstanding group of affiliated asset managers. This gives us greater access to a broad set of investment strategies that will allow us to create new products adding to our already diverse fund offerings, allowing us to better serve current clients and pursue new opportunities."
Expanding into Canada is part of Natixis’ strategic plan to actively pursue international growth. In June, the firm announced plans to launch a new business development initiative in Canada focused on tapping into the steadily growing Canadian institutional market. In 2013, the firm established its retail platform in the UK, adding personnel and launching several mutual funds registered for the UK.
NexGen is recognized for offering tax-efficient wealth management strategies. Their patent pending proprietary mutual fund structure is designed to achieve a number of tax planning objectives that are not publicly offered by any other Canadian mutual fund company. The firm distributes through more than 1,600 financial advisors and more than 100 dealers throughout Canada.
Transaction Details
The transaction will be completed by way of a statutory plan of arrangement pursuant to the Business Corporations Act (Ontario). Upon receipt of the unanimous recommendation of the special committee of independent directors, the NexGen board approved the transaction and has resolved to recommend that NexGen shareholders vote in favor of the transaction at a special meeting of the shareholders to approve the transaction. Blair Franklin Capital Partners Inc. has provided an opinion to the NexGen board of directors and special committee that, as of October 24, 2014, the consideration under the proposed transaction is fair, from a financial point of view, to NexGen's shareholders.
Completion of the transaction is subject to customary closing conditions, including Ontario court approvals, a favorable vote of at least two-thirds of the votes cast by NexGen shareholders and applicable regulatory approvals.
In connection with the execution of the arrangement agreement, shareholders who collectively own over 50% of NexGen's issued and outstanding common shares have entered into agreements with Natixis pursuant to which they have agreed, among other things, that they will vote all of their NexGen common shares in favour of the transaction, unless the arrangement agreement is terminated in certain circumstances.
The arrangement agreement includes customary non-solicitation provisions applicable to NexGen and provides for the payment of a CA$1.75 million break-up fee to Natixis if the transaction is terminated in certain circumstances.
NexGen will seek approval for the transaction from its shareholders at a special meeting, which it expects will be held close to yearend. In connection with the meeting, NexGen will mail an information circular to its shareholders providing further details of the transaction.
The proposed transaction will constitute a change of control of NexGen Financial Limited Partnership, the manager of the NexGen mutual funds, and investors in the NexGen funds will be sent notice of the change of control.
In keeping with the Natixis multi-affiliate business model, NexGen will operate autonomously with the existing senior management team. There are no immediate plans to make staffing changes or changes to the NexGen business model.
Assuming timely receipt of all necessary court, shareholder and regulatory approvals and the satisfaction of all other conditions, closing is expected to occur in January 2015.
Advisors
Blair Franklin Capital Partners Inc. is acting as financial advisor to NexGen and Goodmans LLP is acting as legal counsel to NexGen.
Borden Ladner Gervais LLP is acting as legal counsel to Natixis.
About Natixis Global Asset Management, S.A.
Natixis Global Asset Management, S.A. is a multi-affiliate organization that offers a single point of access to more than 20 specialized investment firms in the U.S., Europe and Asia. The firm ranks among the world’s largest asset managers.1 Through its Durable Portfolio Construction® philosophy, the company is dedicated to providing innovative ideas on asset allocation and risk management that can help institutions, advisors and individuals address a range of modern market challenges. Recognized as the #1 U.S. mutual fund family for 2013 performance in the annual Barron’s/Lipper Fund Family Ranking,2 Natixis Global Asset Management, S.A. brings together the expertise of multiple specialized investment managers based in Europe, the United States and Asia to offer a wide spectrum of equity, fixed-income and alternative investment strategies.
Headquartered in Paris and Boston, Natixis Global Asset Management, S.A.’s assets under management totaled $930.5 billion (€679.5 billion) as of June 30, 2014.3 Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.’s affiliated investment management firms and distribution and service groups include Absolute Asia Asset Management; AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Capital Growth Management; Darius Capital Partners; Gateway Investment Advisers; H2O Asset Management; Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; McDonnell Investment Management; Mirova Asset Management; Natixis Asset Management; Ossiam; Natixis Environnement & Infrastructure Luxembourg; Reich & Tang Asset Management; Snyder Capital Management; Vaughan Nelson Investment Management; Vega Investment Managers; and Natixis Global Asset Management Private Equity, which includes Seventure Partners, Naxicap Partners, Alliance Entreprendre, Euro Private Equity, Caspian Private Equity and Eagle Asia Partners.
About NexGen Financial
NexGen Financial Corporation was founded to develop value-added investment solutions for financial advisors and their clients. The firm is focused on the creation of innovative investment products and services that meet the needs of Canadians seeking more tax-efficient investment opportunities and greater control over the tax treatment of their investments. Managed by strong investment professionals, NexGen’s unique Registered and Tax-Managed Fund offerings are well positioned as attractive investment opportunities for Canadians looking to manage the tax costs associated with traditional investment solutions.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of securities legislation and that are based on the expectations, estimates and projections of management of the parties as of the date of this news release unless otherwise stated. Forward-looking statements are generally identifiable by use of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" or the negative of these words or other variations on these words or comparable terminology. More particularly, and without limitation, this news release contains forward-looking statements and information concerning expectations regarding the consideration to be issued pursuant to the transaction, the ability of NexGen and Natixis to consummate the transaction on the terms and in the manner contemplated thereby, the anticipated benefits of the transaction, and the anticipated timing of the transaction. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others, the time required to prepare and mail meeting materials to NexGen shareholders, the ability of the parties to receive, in a timely manner and on satisfactory terms, the necessary court, shareholder, stock exchange and regulatory approvals and the ability of the parties to satisfy, in a timely manner, the conditions to the closing of the transaction, as well as other uncertainties and risk factors set out in filings made from time to time by NexGen with the Canadian securities regulators, which are available on SEDAR at www.sedar.com. Actual results, developments and timetables could vary significantly from the estimates presented. Readers are cautioned not to put undue reliance on forward-looking statements.
1 Cerulli Quantitative Update: Global Markets 2014, ranked Natixis Global Asset Management, S.A. as the 16th largest asset manager in the world based on assets under management as of December 31, 2013.
2 Barron's/Lipper 2013 one-year fund family ranking based on 64 qualifying U.S. fund companies. Each fund family must have at least three funds in Lipper's general U.S.-stock category, one world (global and international), one mixed-asset/balanced (stocks and bonds), two taxable bond and one tax-exempt bond fund. Natixis was not ranked for the 5- and 10- year periods. Past performance is no guarantee of future results.
3 Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the SEC’s definition of ‘regulatory AUM’ in Form ADV, Part 1.
Regulatory Disclaimer
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
