Deals

Impax Asset Management Group plc to acquire Pax World Management LLC

Posted: 18th September 2017 08:47
Impax Asset Management Group plc, the AIM quoted investment management group, today announces that it has entered into agreements to acquire 100% of Pax World Management LLC, subject to certain closing conditions.

Strategic rationale for the acquisition

  • Combination of two pioneering firms focused on the transition to a more sustainable economy:
  • Rising interest from asset owners worldwide in allocating capital to high growth sustainable investment opportunities, in investment products that take a broad view of risk, including environmental, social & governance ("ESG") factors, and/or that demonstrate positive, non-financial impact;
  • Impax, founded in 1998, and Pax, founded in 1971, have extensive, diversified client bases and award-winning investment products that reflect these concepts;


Pro forma assets under management ("AUM") of the combined Group would be £10.3 billion (US$13.4 billion).[1]

  • Highly complementary investment capabilities:
  • Wider team and deeper bench of investment talent offers a broader range of investment solutions for clients;

-  Impax, which is headquartered in London, with offices in the New York metropolitan region, Portland (OR) and Hong Kong, has assets under management of £7.245 billion (US$9.367 billion), and focuses on actively managed global public equity and private equity strategies;

- Pax, which is headquartered in Portsmouth (NH), USA, has AUM of £3.477 billion (US$4.496 billion), offers actively and passively managed equity and fixed income strategies.

  • Acquisition builds on the companies' successful ten year relationship and similar business cultures:

- Impax and Pax have collaborated since 2007 in the design and management of the Pax Global Environmental Markets Fund, which as of 31 August 2017 had net assets of US$511 million.

Financial terms
  • Impax to acquire 100% of Pax at an initial valuation of US$52.5 million.  Additional contingent payments of up to US$37.5 million payable in 2021, subject to Pax's performance:
  • Exiting shareholders, principally the Shadek family, representing ca. 83.3% interest in Pax, to receive US$44.2 million at Closing and up to US$31.3 million of contingent payments;
  • Management shareholders, representing ca.16.7% interest in Pax to receive Impax shares in 2021 valued at a minimum of US$8.3 million plus up to US$6.3 million of contingent payments.
  • Closing conditions include approval by the shareholders of the mutual funds managed by Pax.

Integration plan

  • Agreed integration plan designed to preserve and enhance client service:
  • Both management and investment teams to remain in place post Closing;
  • Mutual funds managed by Pax will retain the Pax brand name;
  • Pax will be renamed Impax Investment Management (US) LLC, and will become a division of Impax
  • Joe Keefe, Pax's President and Chief Executive Officer will continue to lead Pax, reporting to Ian Simm, Impax's Chief Executive, and is expected to join the board of Impax Asset Management Ltd, Impax's London-based investment management subsidiary.

 Keith Falconer, Chairman of Impax stated:

"At a time when many asset owners are seeking increased exposure to investment opportunities arising from the transition to a more sustainable global economy, Impax's acquisition of Pax represents a compelling opportunity for all stakeholders."

Ian Simm, Founder and Chief Executive of Impax commented:

"I am delighted that, after a decade of working with Joe and his team to design, launch and manage the Pax Global Environmental Markets Fund, the Impax and Pax teams will be joining forces."

"Like Impax, Pax has a long track record as a pioneer in sustainable investing and a strong team of highly experienced investment management and support staff.  The combined group will start with a closely aligned business culture and be well placed to offer a broader service and more diversified range of products to existing and future clients."

Joe Keefe, President and Chief Executive Officer of Pax added:

"This is an exciting new chapter in our decade long partnership with Impax.  Combining our two firms will create a leading sustainable investment manager with business on both sides of the Atlantic. Pax World Funds' shareholders stand to benefit in significant ways from our increased scale, research and investment capabilities as we seek to deliver a more robust investment and client service platform for the global market."

There will be a conference call for analysts at 11am today. Please contact the Company for details (a.gilding@impaxam.com).

 


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