By (RTTNews) – Wednesday, Victory Capital Holdings, Inc. (VCTR) announced an agreement to acquire First Eagle Investments, a privately held global asset manager, from Genstar Capital and First Eagle employees for total consideration of approximately $7.0 billion.
The total consideration includes approximately $4.4 billion in cash and $2.0 billion in newly issued Victory Capital equity. Also, Victory Capital will assume $575 million of First Eagle’s existing 7.25% senior secured notes due 2032.
Following the acquisition, Genstar is expected to own approximately 14.6% of Victory Capital on a fully diluted, as-converted basis, with its voting interest limited to 4.9%. Also, Genstar will be entitled to designate two directors to the Victory Capital Holdings Board of Directors.
The company will fund the transaction with fully committed financing from BofA Securities and RBC Capital Markets, LLC, comprising a new $3.5 billion term loan B facility and approximately $950 million of new secured notes, together with an upsized $200 million revolving credit facility.
The transaction is expected to be approximately 35% accretive to 2027E adjusted earnings per share, including approximately $280 million in anticipated net expense synergies, creating a combined company with annual revenue of approximately $3.2 billion, the company stated.
Upon the closing of the deal, First Eagle will operate on Victory Capital’s platform, while retaining its brand, investment autonomy, and existing investment processes.
The transaction is expected to close by the end of the first quarter of 2027.
In pre-market hours, VCTR is trading at $114.99, down 0.30 percent on the Nasdaq.