TA exits Merian to Jupiter for £370m

Jupiter will pay £370m in equity (financed via the issue of 95.4 million new shares in the business) and a further £20m upon achieving certain revenue milestones.

TA will retain 16% of the combined company and is entitled to nominate a non-executive member of the board of the company. Fund managers who manage 87% of Merian's assets under management will together own 1% of the combined company.

Merian will be acquired with net debt of £29m, while Jupiter intends to issue £50m of tier-2 subordinated debt, resulting in combined surplus regulatory capital of approximately £70-100m.

Jupiter had a market capitalisation of £1.91bn at the time of publication.

The acquisition, which is subject to regulatory and Jupiter shareholder approval, is expected to complete in the second half of 2020.

Previous funding
TA Associates acquired a majority stake in Old Mutual Wealth's single-strategy asset management business for £600m in December 2017. The management team of the company also participated in the transaction.

The deal gave the business an enterprise value of £600m, with the sale structured as £570m in cash up front followed by £30m payable after completion, and not linked to performance conditions.

The majority of the current management team of the single-strategy business, including CEO Richard Buxton, remained with the company post-transaction.

Company
Headquartered in London, Merian employs 233 people and was founded in 2018 when it was spun off from Old Mutual. It is an asset manager that offers institutional investors access to equities, fixed income and alternative assets through a series of funds.

Profits before tax for 2016 stood at £60m (of which £26m was performance-fee related) with gross assets of £198m. Merian had AUM of £22.4bn as at 31 December 2019 and reported EBITDA of £92.8m from revenues of £298m for 2018.

Advisers
Acquirer – Fenchurch Advisory Partners (corporate finance); JP Morgan Cazenove (corporate finance); Numis (corporate finance).

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