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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Jupiter Fund Management plc    JUP   GB00B53P2009

JUPITER FUND MANAGEMENT PLC

(JUP)
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Jupiter snaps up Merian as UK fund managers consolidate

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02/17/2020 | 03:57am EDT
FILE PHOTO: The Canary Wharf financial district is seen at dusk in London

British money manager Jupiter Fund Management has agreed to buy rival Merian Global Investors for an initial 370 million pounds ($483 million) in shares, in a deal that will make it Britain's second-largest retail funds provider.

The deal is the latest among actively run fund managers, which are facing rising regulatory costs and pressure on fees as more investors turn to passive funds aiming to do no more than track the makeup of a benchmark index such as the FTSE 100.

Jupiter, long considered a merger target in its own right, said the deal with Merian would accelerate its growth plan, adding scale and diversifying its fund range.

After losing more than 50% of its value in 2018 as certain key funds shed assets, the firm recovered somewhat last year after the appointment of former Janus Henderson co-CEO Andrew Formica, with many expecting his arrival to lead to new deals.

Despite announcing outflows of 4.5 billion pounds in 2019 in a trading statement alongside news of the deal, the Merian tie-up's helped send Jupiter shares up 8% early on Monday, making it the top gainer in the FTSE 250 mid-cap index.

"This is an exciting acquisition that enhances our position as a leading UK asset manager, provides increased scale and diversification into attractive product areas, and creates stronger future growth prospects for the business," Jupiter chief executive Andrew Formica said in a statement.

For Merian, it marks a quick return to listed status as part of a larger firm, less than two years after it was created through a private equity-backed buyout from Old Mutual under the leadership of stock-picker Richard Buxton.

Since then, the firm has struggled with poor performance and outflows of client cash, prompting the firm to announce a major restructuring in December.

The deal should also prove a windfall for Buxton and other management shareholders. They will collectively own around 1% of Jupiter stock after the deal completes and have the potential to earn an extra 20 million pounds if certain targets are met.

After completion, Merian investors will own around 17% of Jupiter. TA Associates, the private equity firm that helped Merian get off the ground and which was previously invested in Jupiter, will hold a stake of around 16%.

"We look forward to becoming a long-term shareholder and partner with Jupiter once again," said Chris Parkin, managing director of TA Associates.

"Our substantial stake in the combined firm underlines our belief that this transaction will deliver significant strategic benefits and returns to shareholders."

($1 = 0.7668 pounds)

By Simon Jessop

Stocks mentioned in the article
ChangeLast1st jan.
BYD COMPANY LIMITED -1.47% 43.5 End-of-day quote.11.97%
JANUS HENDERSON GROUP PLC -1.51% 21.56 Delayed Quote.-11.82%
JUPITER FUND MANAGEMENT PLC 0.64% 250.2 Delayed Quote.-38.92%
OLD MUTUAL LIMITED -11.61% 50.38 Delayed Quote.-52.25%
THE LEAD CO., INC. -2.37% 412 End-of-day quote.5.64%
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Financials
Sales 2020 318 M 392 M 392 M
Net income 2020 82,1 M 101 M 101 M
Net cash 2020 158 M 195 M 195 M
P/E ratio 2020 15,0x
Yield 2020 6,53%
Capitalization 1 112 M 1 372 M 1 373 M
EV / Sales 2019
EV / Sales 2020 3,01x
Nbr of Employees 522
Free-Float 89,3%
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Mean consensus HOLD
Number of Analysts 14
Average target price 221,93 GBp
Last Close Price 250,20 GBp
Spread / Highest target 39,9%
Spread / Average Target -11,3%
Spread / Lowest Target -36,1%
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Managers
NameTitle
Andrew James Formica Chief Executive Officer & Director
Nichola Pease Non-Executive Chairman
Wayne Mepham Chief Financial Officer & Director
Edward Henry Bonham Carter Vice Chairman
Jonathon Roderick Alan Bond Senior Independent Director
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