Wisdom Tree to acquire $17.6bn business from ETF Securities
New York-headquartered passives specialist Wisdom Tree has announced the acquisition of ETF Securities’ Exchange-Traded Commodity, Currency, Short- and Leveraged business, as part of a $17.6bn (€15.1bn) deal, in a bid to expand its presence in Europe.
As a result of the acquisition, Wisdom Tree is set to become the world’s 9th largest provider of exchange traded products, managing approximately $66bn (€56.6bn) in assets. While the deal constitutes a definitive agreement, it is still subject to regulatory approval, both parties aim to close the transaction in the first quarter of 2018.
Wisdom Tree has funded the deal with a cash consideration of $253m (€217.1m), of which $200m (€171.6m) of newly issued debt and $53m (€45.4m) of cash on hand.
The group also disclosed that stock consideration consists of 15,250,000 shares of common stock and 14,750 shares of a new class of Series A non-voting preferred stock that is convertible into an aggregate of 14,750,000 shares of common stock.
Voting rights associated with the stock consideration will be capped at 9.99% and will represent initial ownership of approximately 18% of WisdomTree’s outstanding common stock on an as-converted basis. ETF Securities will be subject to customary lockup, voting and standstill provisions on its shares, Wisdom Tree said.
Jonathan Steinberg, WisdomTree CEO and President comments: “The acquisition will immediately add scale, diversification and profitability to our business in Europe, the second largest ETF market in the world and a growing and strategically important region for us and the entire industry.”