Toronto-based alternative asset manager Sprott Inc.'s Sprott Asset Management LP agreed to acquire the gold strategy asset management business of New York-based Tocqueville Asset Management LP.
Sprott will pay Tocqueville total consideration of up to $50 million, comprised of a payment at closing of $10 million in cash and Sprott common shares valued at $5 million. Tocqueville will also be eligible to receive contingent consideration valued at up to an additional $30 million in cash and Sprott common shares valued at $5 million, subject to the achievement of certain financial performance conditions over the two years following the closing of the deal, which is expected to happen in January 2020. Sprott will use cash on hand to finance the cash portion of the purchase price.
The acquisition is expected to add $1.9 billion or C$2.5 billion to Sprott's assets under management.
Under the deal, the companies are considering to transfer to Sprott the responsibility to manage or subadvise the gold strategies now being managed or subadvised by the Tocqueville gold investment team for various clients, such as the Tocqueville Gold Fund and other institutional accounts.
Upon the deal's closing, the Tocqueville gold investment team composed of Senior Portfolio Manager John Hathaway and Portfolio Managers Douglas Groh and Ryan McIntyre will join Sprott Asset Management.