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Rating:UPDATE 1| Private Equity Buys American Beacon Not Rated 5.0 Email Routing List Email & Route  Print Print
Wednesday, April 16, 2008

UPDATE 1| Private Equity Buys American Beacon

Reported by Armie Margaret Lee

AMR Corp. is selling its asset management arm American Beacon Advisors to Lighthouse Holdings, which is owned by investment funds affiliated with private equity firms Pharos Capital Group and TPG Capital.

Bill Quinn
American Beacon Advisors
Under the deal, which is expected to close this summer, AMR will get about $480 million and retain a 10-percent stake in American Beacon.

In early March, The MFWire reported that a pitch book for American Beacon was again making the rounds. AMR last shopped American Beacon in 2002 and 2003.

In 2007, American Beacon recorded gross revenue of $101 million and income before taxes of $48 million. Both were up about 40 percent from 2006.

AMR chairman and CEO Gerard Arpey said in a statement that the decision to sell American Beacon followed a "careful evaluation of the strategy that we believe will deliver the most value to our shareholders and create the ownership structure that makes the most sense for American Beacon."

American Beacon chairman Bill Quinn described the timing of the sale as "just right for our company, our customers and our employees."

"Pharos and TPG believe that the asset management business is a robust sector, in which American Beacon is a strong leader," said Kneeland Youngblood, co-founder and managing partner of Pharos Capital.

Credit Suisse served as AMR's adviser on the deal and Rothchild Inc. continues to advise AMR in its ongoing strategic review. Merrill Lynch served as adviser to Pharos Capital and TPG Capital.

American Beacon, founded in 1987, operates 17 mutual funds and offers customized fixed income portfolio management services.

It also provides cash management services to AMR, and investment advisory services and investment management services for American's pension, 401(k) and health and welfare plans.

Wednesday, AMR Corp., American Beacon's parent company also announced a net loss of $328 million for the first quarter.  

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