BrightSphere Investment Group Inc. Announces Agreement to sell Affiliate, Landmark Partners LLC
March 31 2021 - 6:02AM
Business Wire
- BrightSphere and the management team of Landmark Partners LLC
have entered into an agreement to sell 100% of the equity interests
in Landmark to Ares Management Corporation. BrightSphere to receive
approximately $724 million in cash for its 60% ownership interest
in Landmark and its co-investment in Landmark funds
- Total expected after-tax proceeds to BrightSphere of
approximately $630 million
BrightSphere Investment Group Inc. (NYSE: BSIG) today announced
that it has entered into a definitive agreement to sell its 60%
ownership interest in Landmark Partners LLC (“Landmark”) to Ares
Management Corporation (NYSE: ARES) for $690 million. As part of
the transaction, Ares will also acquire the 40% ownership interest
in Landmark held by the Landmark management team for $390 million,
for a total transaction value of approximately $1.1 billion for
100% of Landmark Partners LLC.
In addition to acquiring BrightSphere’s equity interest in
Landmark, Ares has also agreed to acquire BrightSphere’s
co-investments in Landmark funds, which had a book value of
approximately $34 million as of December 31, 2020. BrightSphere
anticipates total after-tax proceeds from the transaction of
approximately $630 million, including proceeds from the sale of
co-investments.
The transaction is subject to customary regulatory approvals and
closing conditions and is anticipated to close in the second
quarter of 2021.
Suren Rana, BrightSphere’s President and Chief Executive Officer
said, “Landmark is combining with one of the top leaders in the
alternatives business for whom Landmark brings highly strategic,
complementary and synergistic capabilities. I would like to thank
the remarkably talented team at Landmark for their important
contributions to BrightSphere. We sincerely wish them the best in
all their future initiatives.”
“The valuation received in this transaction unlocks significant
value for BrightSphere’s shareholders and we believe again
highlights the high intrinsic value embedded in our businesses
relative to our stock’s current trading levels. Our remaining
business continues to be strong with best-in-class quantitative
strategies offered through Acadian as well as fundamental
strategies through TSW and private alternatives strategies through
Campbell Global,” Mr. Rana added.
Founded in 1989 and acquired by BrightSphere in August of 2016,
Landmark specializes in secondary market transactions in private
equity, real estate and infrastructure funds and investments. As of
and for the year ended December 31, 2020, Landmark had $18.4
billion in assets under management, with GAAP management fee
revenue of $146.8 million and contributed GAAP net income
attributable to controlling shareholders and Adjusted EBITDA to
BrightSphere of $12.3 million and $42.2 million, respectively.1
Morgan Stanley & Co LLC acted as financial advisor to
BrightSphere. Goldman Sachs & Co. LLC acted as financial
advisor to Landmark. Ropes & Gray served as legal advisor to
BrightSphere and Landmark. RBC Capital Markets, LLC and Credit
Suisse Securities (USA) LLC acted as financial advisors to Ares and
Kirkland & Elis LLP served as their legal advisor.
About BrightSphere
BrightSphere is a diversified, global asset management company
with approximately $157 billion of assets under management as of
December 31, 2020. Through its world-class investment management
Affiliates, BrightSphere offers sophisticated investors access to a
wide array of leading quantitative and solutions-based, private and
public market alternative, and liquid alpha strategies designed to
meet a range of risk and return objectives. For more information,
please visit BrightSphere’s website at www.bsig.com. Information
that may be important to investors will be routinely posted on our
website.
Forward Looking Statements
This press release includes forward-looking statements,
including those related to the completion of our disposition of
Landmark, the expected total and after-tax proceeds from the
disposition, the expected closing date of the transaction and the
strength and intrinsic value of our business. The words or phrases
“expect,” “anticipate,” “estimate,” and other similar expressions
are intended to identify such forward-looking statements, but the
absence of these words does not necessarily mean that a statement
is not forward-looking. Such statements are subject to various
known and unknown risks and uncertainties and readers should be
cautioned that any forward-looking information provided by or on
behalf of the Company is not a guarantee of future performance.
Actual results may differ materially from those in
forward-looking information as a result of various factors, some of
which are beyond the Company’s control, including, but not limited
to, those discussed in the Company’s most recent Annual Report on
Form 10-K, filed with the Securities and Exchange Commission on
March 1, 2021, and subsequent SEC filings, as well as those related
to the expected closing of the transaction and the satisfaction of
necessary closing conditions. Due to such risks and uncertainties
and other factors, the Company cautions each person receiving such
forward-looking information not to place undue reliance on such
statements. Further, such forward-looking statements speak only as
of the date of this press release and the Company undertakes no
obligations to update any forward looking statement to reflect
events or circumstances after the date of this press release or to
reflect the occurrence of unanticipated events.
Non-GAAP Financial Measures
This release contains references to Adjusted EBITDA, which is a
non-GAAP financial measure. A reconciliation of Adjusted EBITDA to
GAAP net income attributable to controlling interests is included
below. The Company notes that its calculation of Adjusted EBITDA
may not be consistent with Adjusted EBITDA as calculated by other
companies.
Reconciliation of Landmark GAAP net income attributable to
controlling interests to Adjusted EBITDA
For the year ended December 31, 2020
U.S. GAAP net income
attributable to controlling interests
$
12.3
Impact of a one-time compensation arrangement that includes
advances against future compensation payments
17.0
Non-cash key employee-owned equity and profit interest revaluations
(6.0
)
Amortization of acquired intangible assets and pre-acquisition
employee equity
12.5
Interest income
(0.1
)
Interest expense
0.1
Depreciation and amortization
0.8
Income tax expense
5.6
Adjusted EBITDA
$
42.2
1 See “Non-GAAP Measures” and “Reconciliation of Landmark GAAP
net income attributable to controlling interests to Adjusted
EBITDA” at the end of this release for more information.
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version on businesswire.com: https://www.businesswire.com/news/home/20210331005475/en/
Elie Sugarman ir@bsig.com (617) 369-7300
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