Aberdeen acquires RBS asset management for £84.7m
Aberdeen Asset Management has reached an agreement with the Royal Bank of Scotland (RBS) to acquire a chunk of its asset management arm for £84.7m.
The acquisition will bolster Aberdeen's assets under management by nearly £14bn and will include certain assets and contracts from RBS Asset Management Limited and RBS Asset Management Holdings.
In addition Aberdeen will enter into a long-term distribution agreement for certain products with RBS Wealth Management, including Coutts & Co.
Aberdeen said the purchase consideration will be satisfied by a cash payment of £84.7m on completion of the transaction, which is expected to take place during the first quarter of 2010.
The assets under management of the acquired business were £13.5bn as at 30 September 2009, with associated annual revenues of about £22m and an operating profit of about £10m.
To refinance the £84.7 m plus associated costs and regulatory capital for the acquisition, Aberdeen has also announced a non pre-emptive placing of about 84m new ordinary shares of 10p a share, which represents 8.3 per cent of Aberdeen's current issued ordinary share capital.
The acquired business comprises of RBS' funds of hedge funds business, its long-only multi-manager business and certain private equity and real estate funds of funds.
Its products have been sold primarily through RBS Wealth Manangement (RBSWM), which includes a number of high net worth individual brands, including Coutts & Co.
Aberdeen and RBSWM have entered into a distribution agreement effective from completion of the deal and with a minimum period of five years.
Martin Gilbert, chief executive of Aberdeen, said: "Aberdeen has been looking for some time to establish a high quality platform in the alternatives arena, and this exactly fits our requirements.
"This is a well-run business with an excellent distribution network, which has delivered good performance over a number of years.
"This transaction fits with our corporate strategy, a key part of which has been to make earnings enhancing acquisitions to complement organic growth.
"The addition of this leading multi-manager and specialist alternatives resource will significantly strengthen our existing multi-asset and multi-manager capability, an area our clients are looking towards as part of their overall asset allocations."
Mr Gilbert added: "A further attractive aspect of this deal is the distribution agreement we have secured with RBS Wealth Management that adds to Aberdeen's already significant global client reach."
Bruce Van Saun, group chief financial officer at RBS, said: "This transaction represents another step in our plan to restructure RBS around its core customer franchises.
"Aberdeen is a well regarded and well established global asset manager and will be an excellent new owner for the business.
"We look forward to building an ongoing relationship with Aberdeen primarily focused around the provision of RBS Asset Management's funds of funds and multi-manager products."