is poised to make its biggest U.S. asset management acquisition
in more than a decade, while also sealing an alliance with a key distribution ally.
| Shawn K. Lytle|
Macquarie Group / Macquarie Investment Management / Delaware Funds
U.S. Country Head / Deputy Global Head / President
Yesterday afternoon, Martin Stanley
, head of Macquarie Asset Management, and Shawn Lytle
, global head of Macquarie Investment Management
] (as well as president of Delaware Funds and head of Americas for the Sydney-based Macquarie Group), confirmed that MAM has agreed a pair of deals: first, to buy Ivy Investments'
] Overland Park, Kansas-based parent, Waddell & Reed Financial, Inc.
, for $1.7 billion in cash; and second, to sell
Waddell & Reed's wealth management business to LPL Financial Holdings, Inc.
for $300 million. The deals, pending regulatory and stockholder approvals and the like, are expected to close in the middle of next year.
Waddell's asset management business (including Ivy) had $68 billion in AUM as of September 30 (while its wealth management business had $63 billion in AUA). The net price tag of $1.4 billion (after selling off the wealth management business) thus translates into about 2.1 percent of Waddell's asset management AUM. (The deal is expected to boost MAM's AUM above $465 billion.) The $1.7-billion up-front price tag also translates into $25 per share, about 48 percent above the closing price for Waddell's stock on Tuesday.
Meanwhile, the LPL deal entails a long-term partnership, making Macquarie "one of LPL's top tier strategic asset management partners."
J.P. Morgan Securities
(as lead) and Wells Fargo Securities
advised Waddell on the deal, RBC Capital Markets
advised Macquarie, and Centerview Partners
advised LPL. In terms of legal counsel, Norton Rose Fulbright
supported Waddell, Allen & Overy
supported Macquarie, and Ropes & Gray
"The addition of Waddell & Reed Financial, Inc. and our enhanced partnership with LPL will significantly increase our ability to grow and invest in our combined business for the benefit of our clients," Stanley states. "Ivy Investments' complementary investment capabilities will provide diversification to Macquarie Asset Management's capabilities and client base. The consideration offered reflects the quality of Waddell & Reed's business and the future benefits of our partnership with LPL."
Lytle describes the deal as "an important step forward" in the Delaware Funds growth strategy.
"The acquisition of Waddell & Reed's asset management business and our partnership with LPL significantly strengthens our position as a top 25 U.S. actively managed, long-term, open-ended mutual fund manager across equities, fixed income, and multi asset solutions," Lytle states.
, president and CEO of LPL, lauds Waddell's FAs as "a terrific fit both culturally and strategically."
"Additionally, we look forward to deepening our long-term partnership with Macquarie, which will help us preserve unique aspects of the Waddell & Reed advisor experience while also positioning us to explore additional long-term opportunities together," Arnold states.
, CEO of Waddell, puts the deals in the context of a multi-year effort to leverage Waddell's heritage to transform the 83-year-old firm "into a more diversified and growth-oriented financial services enterprise."
Macquarie is no stranger
to acquisitions, including in the U.S. asset management space. In 2010 they bought
a $135-billion-AUM U.S. mutual fund business, for $428 million. In 2018, Macquarie bought
a $4.94-billion-AUM asset manager in Luxembourg. And last year Macquarie acquired
a $12.3-billion-AUM U.S. mutual fund business (pricing and terms of which were not disclosed.)
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