reached a deal today to buy SunTrust Banks'
money market management business, which has total assets of $17 billion. The price tag includes upfront cash payments that could total up to $8.75 million due at the transaction closing dates, according to Federated's
. The deal is expected to be complete by yearend.
The deal also includes contingent purchase price payments payable over five years. Based on asset levels as of May 31, 2010, the payments would total approximately $30 million over five years.
Federated did not use an investment banker, according to company spokesman Ed Costello.
The assets changing hands are currently managed by SunTrustís RidgeWorth Capital Management
Inc. and its subsidiary StableRiver Capital Management
Federated will not be bringing over personnel from the acquired funds, Costello said.
Nine RidgeWorth money market mutual funds will be transitioned into six existing Federated money funds. In addition, certain assets maintained by SunTrust in collective and common funds will be transitioned to Federated money market mutual funds.
"The transition builds on Federatedís long-term relationship with SunTrust by providing current SunTrust clients access to Federatedís impressive breadth of products, experienced money managers, proven credit process and extensive customer-service capabilities," stated Federated CEO J. Christopher Donahue
Federated managed some $350 billion in assets in 137 funds and a variety of separately managed accounts as of March 31.
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