Ashmore pays $246m for stake in fellow EM specialist
Ashmore has purchased a majority stake in Emerging Markets Management for a total that could reach $246m as it looks to deepen its developing markets expertise and expand its equities business.
The emerging markets specialist is to acquire a majority interest in EMM of 62.9%. Previous EMM shareholder Amundi is to divest its stake but will maintain responsibility for distributing EMM products in Europe.
The US-based EMM has $10.4bn in assets under management (as at 31 January) and will give Ashmore a combined total of £57bn in AUM, approximately 20% of which will now be in equity investments.
The deal will see Ashmore pay an initial consideration of $96m in cash and $29.9m in new ordinary shares, with a further $120.1m payable in three annual instalments based on the achievement of certain financial targets. Ashmore is able to reduce this extra consideration should EMM see redemptions from its existing AUM.
“This transaction represents an attractive and logical step in Ashmore’s broader strategy to grow and develop the Ashmore brand and to further diversify Ashmore’s revenue streams. More specifically, it is consistent with our strategy to grow our equity investment theme,” said Ashmore CEO Mark Coombs.
The deal is expected to complete by the end of May 2011. Separately, Ashmore has reported a 14% rise in pre-tax profits to £127.6m for the six months to 31 December 2010, with assets under management rising by 32% to $46.7bn.