Delivers immediate value and significant
premium to stockholders
Accelerates transformation on behalf of clients
and advisors
Macquarie Group also announced its agreement to
sell Waddell & Reed Financial, Inc. wealth management platform
to LPL Financial for $300 million providing continuity for existing
Waddell & Reed wealth management business
Waddell & Reed Financial, Inc. (NYSE: WDR) today announced
it has entered into a merger agreement with Macquarie Asset
Management, the asset management division of Macquarie Group (ASX:
MQG; ADR: MQBKY), under which Macquarie would acquire all of the
outstanding shares of Waddell & Reed for $25.00 per share in
cash representing total consideration of $1.7 billion.
The transaction represents a premium of approximately 48% to the
closing price of Waddell & Reed common stock on December 1,
2020, the last trading day prior to the transaction announcement,
and a premium of approximately 57% 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 U.S. 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 $465
billion, with the combined business becoming a top 251 actively
managed, long-term, open-ended U.S. 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 U.S. 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 September 30, 2020, Waddell & Reed Financial, Inc.’s
asset management business had $68 billion of assets under
management and its wealth management business had assets under
administration of $63 billion.
Philip J. Sanders, Chief Executive Officer of Waddell & Reed
Financial, Inc., said: “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, said: “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, added: “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 U.S. 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, said: “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.
Advisors and Counsel
J.P. Morgan Securities LLC served as lead financial advisor to
Waddell & Reed Financial, Inc. Wells Fargo Securities, LLC also
served as financial advisor and Norton Rose Fulbright US LLP served
as lead counsel. RBC Capital Markets served as exclusive financial
advisor and Allen & Overy served as lead counsel to
Macquarie.
About Waddell & Reed Financial, Inc.
Through its subsidiaries, Waddell & Reed Financial, Inc. has
provided investment management and wealth management services to
clients throughout the United States since 1937. Today, we
distribute our investment products through the unaffiliated channel
under the IVY INVESTMENTS® brand (encompassing broker/dealer,
retirement, and registered investment advisors), our wealth
management channel (through independent financial advisors
associated with WADDELL & REED, INC.), and our institutional
channel (including defined benefit plans, pension plans, endowments
and subadvisory relationships). For more information, visit
ir.waddell.com.
About Macquarie Asset Management
Macquarie Asset Management (MAM) is Macquarie's asset management
business. MAM is a full-service asset manager, providing investment
solutions to clients across a range of capabilities including
infrastructure & renewables, real estate, agriculture,
transportation finance, private credit, equities, fixed income, and
multi-asset solutions. As at 30 September 2020, MAM had $A554.9
billion of assets under management. MAM has over 1,900 staff
operating across 20 markets in Australia, the Americas, Europe and
Asia. MAM has been managing assets for institutional and retail
investors since 1980 in Australia and 1929 in the US, through a
predecessor firm, formerly known as Delaware Investments. Delaware
Funds by Macquarie refers to certain investment solutions that MAM
distributes, offers, refers, or advises.
About LPL Financial
LPL Financial (https://www.lpl.com) is a leader in the retail
financial advice market, the nation’s largest independent
broker/dealer(+) and a leading custodian (or provider of custodial
services) to RIAs. We serve independent financial advisors and
financial institutions, providing them with the technology,
research, clearing and compliance services, and practice management
programs they need to create and grow thriving practices. LPL
enables them to provide objective guidance to millions of American
families seeking wealth management, retirement planning, financial
planning and asset management solutions.
(+)Based on total revenues, Financial Planning magazine June
1996-2020.
Securities and Advisory Services offered through LPL Financial
LLC, a Registered Investment Advisor. Member FINRA/SIPC. We
routinely disclose information that may be important to
shareholders in the “Investor Relations” or “Press Releases”
section of our website.
Additional Information and Where to Find It
This filing may be deemed solicitation material in respect of
the proposed acquisition of Waddell & Reed Financial, Inc. by
Macquarie. In connection with the proposed merger, Waddell &
Reed Financial, Inc. will file with the U.S. Securities and
Exchange Commission (the “SEC”) and furnish to Waddell & Reed
Financial, Inc.’s stockholders a proxy statement and other relevant
documents. This filing does not constitute a solicitation of any
vote or approval. Stockholders are urged to read the proxy
statement when it becomes available and any other documents to be
filed with the SEC in connection with the proposed merger or
incorporated by reference in the proxy statement because they will
contain important information about the proposed merger.
Investors will be able to obtain free of charge the proxy
statement and other documents filed with the SEC at the SEC’s
website at http://www.sec.gov. In addition, the proxy statement and
our annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and amendments to those reports filed
or furnished pursuant to section 13(a) or 15(d) of the Securities
Exchange Act of 1934 are or will be available free of charge
through our website at ir.waddell.com as soon as reasonably
practicable after they are electronically filed with, or furnished
to, the SEC.
The directors, executive officers and certain other members of
management and employees of Waddell & Reed Financial, Inc. may
be deemed “participants” in the solicitation of proxies from
stockholders of Waddell & Reed Financial, Inc. in favor of the
proposed merger. Information regarding the persons who may, under
the rules of the SEC, be considered participants in the
solicitation of the stockholders of Waddell & Reed Financial,
Inc. in connection with the proposed merger will be set forth in
the proxy statement and the other relevant documents to be filed
with the SEC. You can find information about Waddell & Reed
Financial, Inc.’s executive officers and directors in the
definitive proxy statement on Schedule 14A in connection with
Waddell & Reed Financial, Inc.’s 2020 Annual Meeting of
Stockholders, filed with the SEC on March 6, 2020.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended, which reflect the current views and assumptions of
management with respect to future events regarding our business and
industry in general. These statements are generally identified by
the use of such words as “may,” “could,” “should,” “would,”
“believe,” “anticipate,” “forecast,” “estimate,” “expect,”
“intend,” “plan,” “project,” “outlook,” “will,” “potential” and
similar statements of a future or forward-looking nature. Readers
are cautioned that any forward-looking information provided by us
or on our behalf is not a guarantee of future performance. Actual
results may differ materially from those contained in these
forward-looking statements as a result of various factors,
including but not limited to the impact of the COVID-19 pandemic
and related economic conditions, as well as the factors discussed
below. If one or more events related to these or other risks,
contingencies or uncertainties materialize, or if our underlying
assumptions prove to be incorrect, actual results may differ
materially from those forecasted or expected. Certain important
factors that could cause actual results to differ materially from
our expectations are disclosed in the “Risk Factors” section of our
Annual Report on Form 10-K for the year ended December 31,
2019.
Forward-looking statements involve a number of known and unknown
risks, uncertainties and other important factors, some of which are
listed below, that could cause actual results and outcomes to
differ materially from any future results or outcomes expressed or
implied by such forward-looking statements. Important
transaction-related and other risk factors that may cause such
differences include: (i) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
merger agreement; (ii) the transaction closing conditions may not
be satisfied in a timely manner or at all, including due to the
failure to obtain Waddell & Reed Financial, Inc. stockholder
approval and regulatory and client approvals; (iii) the
announcement and pendency of the merger may disrupt our business
operations (including the threatened or actual loss of advisors,
employees, clients or suppliers); and (iv) we could experience
financial or other setbacks if the transaction encounters
unanticipated problems.
Other important factors that may affect our business’ future
operating results, include, but are not limited to: (i) the loss of
existing distribution relationships or inability to access new
distribution relationships;(ii) a reduction in assets under our
management on short notice, through increased redemptions in our
distribution channels or our Funds, particularly those Funds with a
high concentration of assets, or investors terminating their
relationship with us or shifting their funds to other types of
accounts with different rate structures; (iii) the adverse ruling
or resolution of any litigation, regulatory investigations and
proceedings, or securities arbitrations by a federal or state court
or regulatory body; (iv) changes in our business model, operations
and procedures, including our methods of distributing our
proprietary products, as a result of evolving fiduciary standards;
(v) the introduction of legislative or regulatory proposals or
judicial rulings that change the independent contractor
classification of our financial advisors at the federal or state
level for employment tax or other employee benefit purposes; (vi) a
decline in the securities markets or in the relative investment
performance of our Funds and other investment portfolios and
products as compared to competing funds; (vii) our inability to
reduce expenses rapidly enough to align with declines in our
revenues due to various factors, including fee pressure, the level
of our assets under management or our business environment; (viii)
non-compliance with applicable laws or regulations and changes in
current legal, regulatory, accounting, tax or compliance
requirements or governmental policies; (ix) our inability to
attract and retain senior executive management and other key
personnel to conduct our wealth management and investment
management business; (x) a failure in, or breach of, our
operational or security systems or our technology infrastructure,
or those of third parties on which we rely; and (xi) our inability
to implement new information technology and systems, or our
inability to complete such implementation in a timely or cost
effective manner.
The foregoing factors should not be construed as exhaustive and
should be read together with other cautionary statements included
in this and other reports and filings we make with the SEC,
including the information in Item 1 “Business” and Item 1A “Risk
Factors” of Part I and Item 7 “Management’s Discussion and Analysis
of Financial Condition and Results of Operations” of Part II to our
Annual Report on Form 10‑ K for the year ended December 31, 2019
and as updated in our quarterly reports on Form 10-Q for the year
ending December 31, 2020. Any forward-looking statement made in
this press release speaks only as of the date on which it is made.
Factors or events that could cause actual results to differ may
emerge from time to time, and it is not possible for us to predict
all of them. We undertake no obligation to publicly update any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as may be required by
law.
____________________________________
1 Source: Assets under management as of September 30, 2020 -
Based on data represented in Strategic Insight and Morningstar.
Data includes ICI Method of Sales: Salesforce, Institutional and
Retirement. Data excludes Variable Insurance Products, Closed End
Funds, ETFs, passive mutual funds, Money Market Funds, Delaware
Pooled Trusts, and Optimum Funds.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201202005966/en/
Investor Contact: Mike Daley, VP,
Chief Accounting Officer & Investor Relations, (913) 236‑1795,
mdaley1@waddell.com
Media Contact: Roger Hoadley, VP,
Communications, (913) 236-1993, rhoadley@waddell.com
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