Sygnia Ltd. will acquire all issued shares in db X-trackers (RF) Pty. Ltd. from Deutsche Bank AG's Deutsche Group Holdings (SA) Pty. Ltd. for a total consideration of 325 million South African rand in cash.
The South Africa-based asset manager will use a 320 million rand bridge loan from Nedbank Ltd. and internal cash resources to fund the acquisition, which is expected to take effect on or before Aug. 31. Sygnia plans to settle the bridge loan through a rights offering, which it will launch after getting approval for the acquisition from competition authorities and the South African Financial Services Board's Registrar of Collective Investment Schemes.
After the transaction, db X-trackers will become a wholly owned subsidiary of Sygnia and will align its memorandum of incorporation with the company's other subsidiaries.
Sygnia said the deal will enable it to expand to direct management of offshore index-tracking funds, adding that it expects the acquisition to be instantly earnings-enhancing.
Db X-trackers offers exchange-traded funds listed on the Johannesburg Stock Exchange, referencing offshore assets.
As of March 30, US$1 was equivalent to 12.84 South African rand.