Macquarie Asset Management to Buy Waddell & Reed Financial

Posted on 12/03/2020

Macquarie Asset Management, the asset management division of Macquarie Group, signed a deal to buy Waddell & Reed Financial, Inc. Macquarie would acquire all of the outstanding shares of Waddell & Reed for $25.00 per share in cash representing total consideration of US$ 1.7 billion. The transaction represents a premium of approximately 48% to the closing price of Waddell & Reed common stock on December 1, 2020, the last trading day prior to the transaction announcement, and a premium of approximately 57% to Waddell & Reed’s volume-weighted average price for the last 90 trading days.

LPL Part

On completion of the transaction, Macquarie has agreed to sell Waddell & Reed Financial, Inc.’s wealth management platform to LPL Financial Holdings Inc. (Nasdaq: LPLA), a U.S. retail investment advisory firm, independent broker-dealer, and registered investment advisor custodian, and also enter into a long-term partnership with Macquarie becoming one of LPL’s strategic asset management partners. LPL will payMacquarie Group US$ 300 million and integrate Waddell’s approximately 900 brokers and their client assets onto its platform shortly after the deal’s expected close in middle of summer 2021.

As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over US$ 465 billion.

Through its subsidiaries, Waddell & Reed Financial, Inc. has provided investment management and wealth management services to clients throughout the U.S. since 1937. As of September 30, 2020, Waddell & Reed Financial, Inc.’s asset management business had US$ 68 billion of assets under management and its wealth management business had assets under administration of US$ 63 billion. The transaction has been approved by the Boards of Directors of Waddell & Reed Financial, Inc., Macquarie Group and LPL and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed Financial, Inc. stockholder approval and other customary closing conditions.

Advisors and Counsel

J.P. Morgan Securities LLC served as lead financial advisor to Waddell & Reed Financial, Inc. Wells Fargo Securities, LLC also served as financial advisor and Norton Rose Fulbright US LLP served as lead counsel. RBC Capital Markets served as exclusive financial advisor and Allen & Overy served as lead counsel to Macquarie.

Waddell & Reed Financial distributes its investment products through the unaffiliated channel under the IVY INVESTMENTS brand (encompassing broker/dealer, retirement, and registered investment advisors), its wealth management channel (through independent financial advisors associated with WADDELL & REED, INC.), and its institutional channel (including defined benefit plans, pension plans, endowments and subadvisory relationships).

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