Magellan Financial Group → Barrenjoey Capital Partners
completedMagellan Financial Group merged with investment bank Barrenjoey Capital Partners in a deal valuing Barrenjoey at about A$1.62bn, creating a diversified A$45bn financial services group.
Magellan, an asset manager that had lost significant funds under management in prior years, wanted Barrenjoey's corporate advisory and markets business to diversify beyond funds management.
Barrenjoey's owners (including Barclays, which sold down its stake as part of the deal) got liquidity and a listed vehicle. Shareholders backed the plan overwhelmingly, with 91.16% of votes in favour.
Magellan Financial Group shares closed up 21.9% the trading day after the merger was announced.
Magellan shares jumped double digits on both the initial announcement and ACCC clearance, read as the market welcoming diversification away from Magellan's shrinking funds-management base.
Deal mechanics
Not separately named for Magellan in available coverage
Ashurst advised Barclays (a Barrenjoey shareholder) on its stake sale
Two-stage all-scrip deal: Magellan first bought an incremental ~10% economic interest in Barrenjoey from Barclays for A$148.9m, then merged with Barrenjoey via new MFG shares issued to Barrenjoey's existing shareholders
Implied P/E multiple of about 15x
Cleared ACCC review
Equity — a non-underwritten institutional placement (~A$130m) plus a share purchase plan (~A$20m), not debt
Comparable deals in Financial Services
- CC Capital and One Investment Management (OneIM) → Insignia Financial
- Washington H. Soul Pattinson and Co. → Brickworks Limited