is further expanding Raymond James'
multiboutique asset management umbrella, Carillon Tower Advisers
, by buying a pair of Midwestern asset managers with a combined $27 billion in AUM, as of December 31, 2016. The $172.5-million cash deal is expected to effectively double Carillon Tower's size to more than $60 billion in assets under advisement and management.
| Paul Reilly|
Raymond James Financial
Chairman and CEO
This morning Reilly, chairman and CEO of St. Petersburg, Florida-based RayJay, confirms
that the publicly-traded broker-dealer plans to acquire Kansas City, Missouri-based Scout Investments
] and Columbus, Indiana-based Reams Asset Management
from UMB Financial Corp.
The deal is expected to close by the end of the year.
The $172.5-million price tag translates into 0.64 percent of Scout and Reams' $27 billion in AUM.
RBC Capital Markets
advised UMB on the deal, while Stradley Ronon Stevens & Young
provided legal counsel.
, president of Reams, did not immediately return a call for comment on the deal.
Reilly puts the deal in the context of building RayJay's "strong foundation of asset management expertise," which he describes as "a key component of the firm's growth strategies."
, president and chairman of Carillon Tower, states
that buying Scout and Reams "is a natural extension of [Carillon Tower's] long-term growth strategy," an extension that translates into his team team offering "a broader set of investment solutions."
, CEO of Scout, praises RayJay and Carillon Tower as partners who "can work to broaden [Scout's] reach."
"Complementary management philosophies and similar cultures will ensure a smooth transition," Iseman states.
On the UMB side, chairman and CEO Mariner Kemper
Carillon Tower "the right partner" for Scout. He notes that Carillon Tower's "sole focus is on institutional-quality investment management," and he sees the acquirer bringing "enhanced distribution capabilities and scale to Scout."
"The decision to sell Scout Investments comes at a time when our company has evolved. This transaction allows us to invest more time, energy and capital resources into our core businesses," Kemper states. "At the core of our business model is diversified revenue, with noninterest income from the Bank and Fund Services representing 44.7 percent of their combined total revenue in 2016, compared to 27.9 percent median from our peers."
"Scout has been an integral part of our company for more than 30 years," Kemper adds.
Scout, founded in 1982 as a division of UMB, focuses on equity investing. In 2010 it bought
fixed income specialist Reams.
As for Carillon Tower, RayJay created the multi-boutique in 2016 as the parent of three RayJay subsidiaries: San Diego, California-based institutional asset manager ClariVest Asset Management
, Toronto-based ETF strategist Cougar Global Investments
, and St. Petersburg-based mutual fund shop Eagle Asset Management
]. The deal will make Reams and Scout into wholly owned subsidiaries of Carillon Tower.
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