Macquarie Group has agreed to acquire Waddell & Reed Financial, a US-based asset and wealth management company, for nearly $1.7bn.
The Australian group, through its asset management unit, will acquire all the shares of the US firm for $25 per share in cash.
Waddell & Reed Financial’s asset management business has nearly $68bn in assets under management (AUM). Its wealth management business, which operates as Waddell & Reed Financial Services, has close to $63bn in assets under administration (AUA).
Since 1937, Waddell & Reed Financial has been offering investment management and wealth management services to clients across the US. Currently, its investment products are distributed under the IVY INVESTMENTS brand, and also through associated independent financial advisors.
Upon closing of the deal, Macquarie Group will sell Waddell & Reed Financial Services to US-based LPL Financial for $300m plus excess net assets.
Macquarie Group will also enter into a long-term partnership with the US firm by becoming one of the latter’s top-tier strategic asset management partners.
Macquarie Asset Management head Martin Stanley said: “The addition of Waddell & Reed 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.
“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.”
Through the deal with Waddell & Reed Financial, Macquarie Asset Management is expected to grow its AUM to more than $465bn.
The combined business is expected to rank among the top 25 actively managed, long-term, open-ended mutual fund manager in the US in terms of AUM.
Waddell & Reed Financial CEO Philip Sanders said: “Over the past few years, we have been focused on leveraging our strong heritage as the foundation for transforming our firm into a more diversified and growth-oriented financial services enterprise.
“The long-term partnership between Macquarie and LPL as part of this transaction accelerates that transformation and ultimately will benefit our clients and independent Financial Advisors while delivering significant value to our stockholders.”
The deal, which is subject to Waddell & Reed Financial shareholders’ approval, regulatory approvals, and other customary closing conditions, is expected to be completed by mid-2021.
Earlier this month, Macquarie Group reported a net profit after tax attributable to ordinary shareholders of A$985m ($731.56m) for the half year ended 30 September 2020 (1H21). Compared to 1H20, the net profit was down by 32%.
