Sydney-based Magellan Financial Group Ltd. entered into separate deals to acquire Airlie Funds Management and Frontier Partners Group as it seeks to diversify its retail funds management business in Australia and boost its institutional distribution activities in North America.
Magellan will pay a total of US$15 million in cash and about 4.5 million of its own shares for the purchases.
The company will acquire 100% of Airlie through the issuance of Magellan shares to Airlie shareholders. Airlie is an Australian equities fund manager with more than A$6 billion of funds under management.
Magellan and Airlie also plans to launch the Airlie Industrial Share Fund, which will be an active exchange-traded fund listed on the Australian stock exchange.
The deal is expected to be completed Feb. 28.
Further, Magellan announced the acquisition of Frontier, which is its distribution partner in North America. The Frontier group consists of Frontier Partners Inc., a registered investment adviser in North America; Frontegra Strategies LLC, a registered broker-dealer; and Frontegra Asset Management Inc., an investment adviser to a mutual fund platform.
Magellan completed the acquisition of Frontier Partners on Feb. 5. The acquisitions of the other two companies are expected to be completed in 2018, subject to regulatory approval and other conditions.
The purchases will be funded using internal cash and the issuance of Magellan shares.
With the acquisition, Frontier founder Bill Forsyth will become the executive chairman of Magellan's business in North America. He will also continue to act as CEO of Frontier's third-party business.
