A publicly traded, multiboutique, U.S. asset manager is officially poised to make its biggest acquisition yet.

David C. "Dave" Brown Victory Capital Holdings, Inc. Chairman, CEO

Yesterday, David Brown, chairman and CEO of Victory Capital Holdings, Inc. [profile], and Valerie Baudson, CEO of Amundi, confirmed that Victory has officially agreed to buy Amundi US, as expected. The strategic partnership will also include a 15-year mutual distribution agreement between the two firms.

The official engagement comes three months after the two sides unveiled a non-binding memorandum of understanding proposing just such a deal.

PJT Partners and BofA Securities advised Victory on the deal. Willkie Farr & Gallagher LLP provided legal counsel. As initially expected, the plan is for the deal to close by the end of 2024, though the two sides now allow that early 2025 is a possibility, too.

It looks like the agreed-to deal is in-line with (perhaps even identical to) what the two sides publicly proposed back in April. Victory would pay for the deal with its own stock, which would result in Amundi holding a 26.1 percent economic stake in Victory and gaining two Victory board seats. (Per the initial proposal, Amundi's shares would have voting rights of 4.9 percent.)

The distribution deal will still involve Victory distributing Amundi's offerings in the U.S. and Amundi distributing Victory's offerings outside the U.S. And the acquisition of Amundi U.S. is expected to boost Victory's AUM (on a pro forma basis) by $104 billion to $279 billion. (That's a 59-percent increase).

Brown also still expects to realize an estimated $100 million in annual cost savings, most within the first year after the deal.

"This strategic relationship accelerates the globalization of our firm through a new global distribution channel. The transaction's structure is carefully designed to closely align our common interests," Brown states. "In addition, combining the Amundi US business onto our platform will provide important strategic benefits. It will broaden our investment offerings with the addition of new and complementary investment capabilities and will result in a larger and broader US distribution sales and marketing effort and reach."

Baudson calls the deal "a compelling proposition" for the Amundi team and their clients, and a "value-creating deal" for Amundi's shareholders.

"The transaction will allow Amundi to strengthen its presence in the US via a larger US investment and distribution platform. It will also provide Amundi's clients worldwide with access to a broader range of high-performing US investment soltuions," Baudson states. "Thanks to this transaction, Amundi will become a strategic shareholder in a US-based asset management firm with a consistent track record of development." 

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