Perpetual completes Pendal acquisition

In an ASX listing on Monday, Perpetual confirmed the completion of the acquisition of Pendal following some speed bumps late last year.

The deal has seen the creation of a “global leader in multi-boutique asset management with significant scale, diversified investment strategies, world-class ESG capabilities and a stronger global distribution capability, complemented by high-quality wealth management and trustee businesses”, with $200 billion in assets under management.

“We are pleased to finalise the transaction that combines two of Australia’s oldest and most respected active asset management businesses,” said Perpetual chairman Tony D’Aloisio.

“Through this transaction, we have created a leading global multi-boutique asset manager with significant scale, diversified investment strategies, world-class ESG capabilities and a stronger global distribution capability, complemented by Perpetual’s high-quality wealth management and trustee businesses,” he noted.

Also quoted in the announcement, Perpetual managing director and CEO Rob Adams said: “Today is the beginning of an exciting new chapter for both businesses, and collectively our people, our clients and our shareholders. The Perpetual and Pendal businesses are stronger together and are better positioned to invest in and drive our future growth through the expansion of investment capabilities while benefiting from a step change in scale, ESG capability and our significantly enhanced global operating model.”

“Pleasingly, the client consent process has proven to be very successful, with Pendal achieving consents from over 98 per cent of Pendal clients by client revenue, for those clients whose consent was required to the change of control.”

As previously announced, Perpetual’s appointments of two Pendal directors have taken effect and the new executive committee previously announced on 30 November 2022 is in place with work now underway on integration following months of planning and preparation.

“With the transaction now finalised, the new leadership team is focused on delivering our global growth ambitions and executing on the strategic and financial benefits afforded by this transformational acquisition, including delivery of enhanced scale efficiencies; growth of our global distribution footprint; building on our leadership in ESG and realising $60 million in expected run-rate, pre-tax expense synergies,” said Mr Adams.

As of 23 January, Pendal shareholders who owned shares at 7.00pm (AEDT) on 16 January 2023, will receive the consideration mix for shares held by them — a total of $1.65 cash per Pendal share held, less the permitted dividend amount of 3.5¢ per share, that was paid to Pendal shareholders on 15 December 2022, and one Perpetual share for every seven Pendal shares.

A total of 54,747,428 Perpetual shares have been issued to Pendal shareholders as part of the consideration.

Perpetual advised that the cash component of the offer, totalling $619 million will be funded by a new debt facility, which will also be used to refinance Perpetual’s existing debt facility and includes undrawn headroom for liquidity management purposes.

The asset manager confirmed it would provide an update on its debt position at its half-year results presentation in February.