Waddell & Reed Financial has entered into a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group, whereby Macquarie would acquire all of the outstanding shares of Waddell & Reed for USD25.00 per share in cash representing total consideration of USD1.7 billion.
Waddell & Reed Financial has entered into a merger agreement with Macquarie Asset Management, the asset management division of Macquarie Group, whereby Macquarie would acquire all of the outstanding shares of Waddell & Reed for USD25.00 per share in cash representing total consideration of USD1.7 billion.The transaction represents a premium of approximately 48 per cent to the closing price of Waddell & Reed common stock on 1 December, 2020, the last trading day prior to the transaction announcement, and a premium of approximately 57 per cent to Waddell & Reed’s volume-weighted average price for the last 90 trading days.
On completion of the transaction, Macquarie has agreed to sell Waddell & Reed Financial, Inc’s wealth management platform to LPL Financial Holdings Inc. (Nasdaq: LPLA), a leading US retail investment advisory firm, independent broker-dealer, and registered investment advisor custodian, and also enter into a long-term partnership with Macquarie becoming one of LPL’s top tier strategic asset management partners.
As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over USD465 billion, with the combined business becoming a top 251 actively managed, long-term, open-ended US mutual fund manager by assets under management, with the scale and diversification to competitively position the business to maintain and extend its high standards of service to clients and partners.
Through its subsidiaries, Waddell & Reed Financial, Inc has provided investment management and wealth management services to clients throughout the US since 1937. Today, investment products are distributed under the Ivy Investments brand, as well as through independent financial advisors associated with Waddell & Reed, Inc. As of 30 September, 2020, Waddell & Reed Financial, Inc.’s asset management business had USD68 billion of assets under management and its wealth management business had assets under administration of USD63 billion.
Philip J Sanders, Chief Executive Officer of Waddell & Reed Financial, Inc, says: “Over the past few years, we have been focused on leveraging our strong heritage as the foundation for transforming our firm into a more diversified and growth-oriented financial services enterprise. The long-term partnership between Macquarie and LPL as part of this transaction accelerates that transformation and ultimately will benefit our clients and independent financial advisors while delivering significant value to our stockholders.”
Martin Stanley, Head of Macquarie Asset Management, says: “The addition of Waddell & Reed Financial, Inc. and our enhanced partnership with LPL will significantly increase our ability to grow and invest in our combined business for the benefit of our clients. Ivy Investments’ complementary investment capabilities will provide diversification to Macquarie Asset Management’s capabilities and client base. The consideration offered reflects the quality of Waddell & Reed’s business and the future benefits of our partnership with LPL.”
Shawn Lytle, President of Delaware Funds by Macquarie and Head of Macquarie Group in the Americas, adds: “This transaction is an important step forward in our growth strategy for Delaware Funds by Macquarie. The acquisition of Waddell & Reed’s asset management business and our partnership with LPL significantly strengthens our position as a top 25 US actively managed, long-term, open-ended mutual fund manager across equities, fixed income and multi asset solutions.”
Dan Arnold, President and Chief Executive Officer of LPL Financial, says: “Waddell & Reed advisors are highly experienced and well-respected throughout the industry. They are a terrific fit both culturally and strategically, and we welcome them to the LPL family. Looking ahead, we expect our capabilities and resources will benefit their practices and help them unlock additional value and growth. Additionally, we look forward to deepening our long-term partnership with Macquarie, which will help us preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities together.”
The transaction has been approved by the Boards of Directors of Waddell & Reed Financial, Inc, Macquarie Group and LPL and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed Financial, Inc stockholder approval and other customary closing conditions.