Legg Mason Inc.
) inked a deal to acquire New York based private asset manager QS
Investors in order to expand its global investment products
portfolio. The deal is expected to close by first-quarter 2015.
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Legg Mason will assume QS Investors' assets under management and
assets under advisory worth $4.1 billion and $100 billion,
Though terms of the deal are yet to be disclosed, as per the
deal, Legg Mason's quantitative equity division - Batterymarch
Financial Management - and its solutions unit - Legg Mason Global
Asset Allocation - will gradually merge with QS Investors. The
merged entity that will be recognized under QS Investors name
will serve both institutional clients as well as retail
Through this integration process, Legg Mason will bear
restructuring costs of around $35 million. Further, excluding
such costs, the company expects the acquisition to be accretive
to earnings in 2015.
Dechert, LLP acted as Legg Mason's advisor while RBC Capital
Markets - an arm of
Royal Bank of Canada
) - and Paul, Weiss, Rifkind, Wharton & Garrison LLP advised
QS Investors specializes in providing an array of strategies that
include actively managed U.S. and Global equities, Liquid
Alternatives and Customized Solutions to its global client base,
and thus the deal will strongly enhance Legg Mason's global
The latest deal will mark the second acquisition by Legg Mason
since 2005, as back in Mar 2013, the company with its affiliate,
Permal Group, acquired London-based fund-of-hedge-funds firm
Fauchier Partners from BNP Paribas Investment Partners, an asset
management unit of
BNP Paribas SA
Acquisitions of asset management companies are strategic fit for
Legg Mason. Further, the company's diversified product mix,
leverage to the changing market demography, restructuring
initiatives and cost-cutting measures are likely to improve its
operating efficiencies in the near term.
Legg Mason currently holds a Zacks Rank #2 (Buy).
) is a better- ranked stock in this space with a Zacks Rank #1