A 52-year-old fund firm is poised to go private, thanks to a former longtime Fidelity PM.

Marc O. Mayer Manning & Napier, Inc. Chairman, CEO

On Friday, James Morrow, founder and CEO of Callodine Group, LLC, and Marc Mayer, chairman and CEO of Manning & Napier, Inc. [profile], revealed that Boston-based Callodine has agreed to buy publicly traded, Fairport, New York-based Manning for $12.85 per share. That's a 41-percent premium over Manning's share price on Thursday, the day before the deal was unveiled, and about 7.1 percent above the $12-per-share price that Manning IPOed at back in November 2011.

Pending shareholder approval and the like, the deal is slated to close in Q3 2022. In the meantime, Manning has entered a 40-day "go shop" period and can entertain other deal offers, with Callodine having the right to match or exceed other offers.

PJT Partners advised Manning on the deal, while Wells Fargo Securities, LLC, Aviditi Advisors, and MSI Capital Management, LLC advised Callodine. On the legal side, Gibson, Dunn & Crutcher LLP counseled Manning, Morgan, Lewis & Bockius LLP counseled Manning's management team, and Sidley Austin LLP counseled Callodine.

The deal's $293-million price tag translates into about 1.4 percent of Manning's $20.8 billion in AUM (as of February 28, 2022). (That's down about 52 percent from the $43 billion the firm had back in March 2011, shortly before filing to IPO.) Four-year-old Callodine, meanwhile, has about $2 billion in assets across its platform.

East Asset Management, LLC is partnering with Callodine on the deal, contributing about $149 million in equity. (East's owners, Terrence and Kim Pegula, also own the Buffalo Bills and several other professional sports teams in the Buffalo and Rochester areas; Manning's home is outside Rochester.) Wells Fargo, Citizens Bank, and Key Bank have committed to support the Callodine-Manning deal with about $100 million in debt financing.

Mayer is expected to stay on as Manning's chief while rolling over his stake, while Manning will become a wholly owned Callodine subsidiary. (News of the Callodine-Manning deal comes three years after Mayer took over as Manning's CEO.) Manning's management (whose shares in the company account for 10 percent of the voting rights) have signed on to support the deal. According to the statement from Callodine, Manning's "management team, investment philosophy and processes, client-facing teams, and stewardship groups are expected to remain in place." (Manning had 279 employees as of the end of last year.)

Morrow lauds Manning as "a best-in-class investment management firm."

"Growing up in Rochester, NY and having previously been a shareholder of the Company after its IPO, we know this is a business with a long and proud tradition of delivering outstanding results for clients," Morrow states. "We look forward to partnering with the current management team to continue to uphold that standard of excellence."

"Callodine is a long-term investor with deep roots in upstate and western New York, and a natural fit for us, culturally and strategically," Mayer states. "Under the umbrella of Callodine, we will be even better positioned to deliver meaningful outcomes for our clients over the long term ... This partnership will drive our next phase of responsible and thoughtful growth, which will create opportunities for our employees and will further strengthen our ties to our communities." 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE