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Virtus Investment Partners acquiring RidgeWorth Investments in $513M deal

Virtus Investment Partners Inc. has agreed to acquire RidgeWorth Investments, a multiboutique asset management company with $40.2 billion in assets managed by affiliated investment managers and unaffiliated subadvisers.

The transaction values RidgeWorth at $472 million. Virtus will also acquire certain investments at their fair value as of closing, for a total consideration of about $513 million. The deal is expected to be financed using existing balance sheet resources and some combination of debt, equity and equity-linked securities. Morgan Stanley Senior Funding Inc. and Barclays Capital have provided committed debt financing for up to $475 million.

The deal will increase Virtus' assets under management to $86.8 billion on a pro forma basis. It is expected to be accretive to EPS, as adjusted, based on the combined profitability of the companies and expected synergies from the consolidation of duplicate corporate and business support functions.

RidgeWorth is owned by its employees and investment funds affiliated with Lightyear Capital LLC. RidgeWorth's wholly owned affiliates are Seix Investment Advisors LLC, Ceredex Value Advisors LLC and Silvant Capital Management LLC. RidgeWorth also has a minority ownership interest in Zevenbergen Capital Investments LLC.

Certain investment professionals at RidgeWorth's wholly owned affiliates have employment agreements and will roll a meaningful portion of their deal consideration into Virtus stock. The deal is expected to close in mid-2017. The board of trustees of the RidgeWorth mutual funds has approved the reorganization of the RidgeWorth mutual funds into the Virtus mutual funds and will submit the reorganization proposal to fund shareholders for their approval.

Barclays Capital and Morgan Stanley & Co. LLC acted as financial advisers to Virtus, and Willkie Farr & Gallagher LLP was its legal adviser. RBC Capital Markets LLC acted as financial adviser and Davis Polk & Wardwell LLP was legal adviser to RidgeWorth.