YASTEST
Acquisition of
Largest European Commodities Platform Adds Profitability and Scale
in Growing and Strategically Important European Market; Diversifies
Product and Asset Base
Solidifies
WisdomTree as Differentiated and Diversified Global ETP
Provider
Positioned to Grow and Generate Long-Term
Shareholder Value
Combined Company
will be Largest Global Independent ETP Provider
Transaction
Expected to be Immediately and Significantly Accretive to
Earnings
NEW YORK, Nov. 13, 2017 (GLOBE NEWSWIRE) --
WisdomTree Investments, Inc. (NASDAQ:WETF), an exchange-traded fund
("ETF") and exchange-traded product ("ETP") sponsor and asset
manager, announced today that it has entered into a definitive
agreement to acquire ETF Securities' European exchange-traded
commodity, currency and short-and-leveraged business (the "Acquired
Business"), which includes $17.6 billion of assets under management
("AUM") as of November 9, 2017. The acquisition will provide
WisdomTree with immediate scale in Europe, an industry leading
position in European-listed gold and commodity products, greater
AUM diversification globally, and profitability at WisdomTree
Europe and in its International Operating segment.
With the addition of the Acquired Business,
WisdomTree's assets under management would total approximately $66
billion globally on a pro-forma basis, as of November 9, 2017. The
acquisition will secure WisdomTree's spot as the 9th largest ETP
sponsor globally and elevate the company to the largest global
independent ETP provider1 with
significant scale and presence in the two largest ETP markets:
Europe and the U.S.
Under the terms of the agreement, WisdomTree will
exchange $253 million of cash and stock consideration of 30 million
WisdomTree shares for the Acquired Business. Based on Friday's
market close price, the total consideration is valued at $611
million. Excluding one-time transaction and integration costs,
WisdomTree expects that the acquisition will be immediately
accretive to its earnings per share.
"We are very excited to meaningfully expand and
enhance our presence and capabilities in the European market by
adding ETF Securities' market-leading commodity platform to
WisdomTree's differentiated European product offering," said
Jonathan Steinberg, WisdomTree CEO and President. "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. The addition of this complementary and
competitively positioned commodity business is an important
development in WisdomTree's strategy to establish itself as a
differentiated and diversified ETP provider that can thrive
globally and generate long-term shareholder value."
"We have long held Graham Tuckwell and the
business he and his team have built in extremely high regard,"
continued Mr. Steinberg. "Like WisdomTree, ETF Securities was
started from scratch and has had to compete and win at the highest
levels of asset management. Graham is one of the true pioneers of
the ETF industry as the first to establish an exchange-traded gold
exposure on a global basis as well as in Europe. Our shared
entrepreneurial spirit should not be underrated in the development
of this transaction or in the confidence we both have in our
combined company moving forward."
"Over the past 14 years, ETF Securities has built
established market positions and a leading brand in the specialized
ETP market," said Graham Tuckwell, ETF Securities Chairman and
Founder. "Our best in class commodity and currency ETP suite -
including Europe's first gold product - has a proven track record
of innovation, and has allowed us to develop a highly attractive
and diversified institutional, intermediary and retail client base.
Our European ETP business and WisdomTree's global business are
enormously complementary and the combined business will undoubtedly
be a well-diversified, highly innovative force in the industry and
best positioned to serve investors' evolving needs."
Key Transaction
Terms:
- Cash consideration is $253 million, funded by
$200 million of newly issued debt plus $53 million of cash on
hand.
- 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, subject to certain restrictions.
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.
- WisdomTree will adjust its quarterly dividend to
$0.03 per share, starting with the dividend scheduled for payment
in the first quarter of 2018. This dividend level appropriately
balances our new capital structure and allows for the pursuit of
future growth opportunities while continuing to return capital to
shareholders.
Subject to regulatory approval and other customary
closing conditions, the transaction is expected to close in late Q1
of 2018.
Credit Suisse is acting as exclusive financial
advisor to WisdomTree and as lead arranger on the debt financing.
Goodwin Procter is serving as WisdomTree's legal counsel.
Conference Call
Details
WisdomTree will hold a conference call to discuss
the acquisition of ETF Securities' ETP business at 8am ET today,
November 13, 2017. Those wishing to participate can access
the call as follows:
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US/CANADA Participant Toll-Free Dial-In
Number: |
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(877) 303-7209 |
INTERNATIONAL Participant Dial-In Number: |
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(970) 315-0420 |
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The corresponding presentation will be available
at ir.wisdomtree.com. An audio replay will be available
approximately one hour after the call. The audio replay can be
accessed as follows:
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US/CANADA Participant Toll-Free Dial-In
Number: |
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(855) 859-2056 |
INTERNATIONAL Participant Dial-In Number: |
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(404) 537-3406 |
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1 As
measured by AUM.
About
WisdomTree
WisdomTree Investments, Inc., through its subsidiaries in the U.S.,
Europe, Japan and Canada (collectively, "WisdomTree"), is an
exchange-traded fund ("ETF") and exchange-traded product ("ETP")
sponsor and asset manager headquartered in New York.
WisdomTree offers products covering equities, fixed income,
currencies, commodities and alternative strategies.
WisdomTree currently has approximately $48.4 billion in assets
under management globally. For more information, visit our
Investor Relations website.
WisdomTree® is the marketing name for WisdomTree
Investments, Inc. and its subsidiaries worldwide.
ETF Securities - The
intelligent alternative
ETF Securities is one of the world's leading innovators of
Exchange-Traded Products (ETPs) and provides specialist investment
solutions across multiple asset classes to investors around
the world, enabling them to intelligently build and diversify their
portfolios. The company is the largest provider of commodity ETPs
in Europe, having created the world's first gold ETP in 2003. The
company's range of European commodity, currency and short &
leveraged ETPs has a total AUM of US$17.6 billion, as
of November 9, 2017.
Cautionary Statement
Regarding Forward-Looking Statements
This press release contains forward-looking
statements that are based on our management's beliefs and
assumptions and on information currently available to our
management. Although we believe that the expectations reflected in
these forward-looking statements are reasonable, these statements
relate to future events or our future financial performance, and
involve known and unknown risks, uncertainties and other factors
that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by these forward-looking statements. In some cases, you can
identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "intends," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," "continue" or the
negative of these terms or other comparable terminology. These
statements are only predictions. You should not place undue
reliance on forward-looking statements because they involve known
and unknown risks, uncertainties and other factors, which are, in
some cases, beyond our control and which could materially affect
results. Factors that may cause actual results to differ materially
from current expectations include, among other things, the risks
described below. If one or more of these or other risks or
uncertainties occur, or if our underlying assumptions prove to be
incorrect, actual events or results may vary significantly from
those implied or projected by the forward-looking statements. No
forward-looking statement is a guarantee of future performance. You
should read this press release completely and with the
understanding that our actual future results may be materially
different from any future results expressed or implied by these
forward-looking statements.
In particular, forward-looking statements in this
press release may include statements about:
- anticipated trends, conditions and investor
sentiment in the global markets and ETPs;
- anticipated levels of inflows into and outflows
out of our ETPs;
- our ability to deliver favorable rates of return
to investors;
- our ability to develop new products and
services;
- our ability to maintain current vendors or find
new vendors to provide services to us at favorable costs;
- our ability to successfully expand our business
into non-U.S. markets;
- competition in our business; and
- the effect of laws and regulations that apply to
our business.
Our business is subject to many risks and
uncertainties, including without limitation:
- Net outflows in our two largest ETFs - the
WisdomTree Europe Hedged Equity Fund and the WisdomTree Japan
Hedged Equity Fund - have had, and in the future could continue to
have, a negative impact on our revenues.
- Declining prices of securities can adversely
affect our business by reducing the market value of the assets we
manage or causing customers to sell their fund shares and trigger
redemptions.
- Fluctuations in the amount and mix of our AUM may
negatively impact revenues and operating margins.
- We derive a substantial portion of our revenues
from a limited number of products, and as a result, our operating
results are particularly exposed to the performance of these
products and our ability to maintain the AUM of these products, as
well as investor sentiment toward investing in the funds'
strategies and market-specific and political and economic
risk.
- Much of our AUM is held in our U.S. listed ETFs
that invest in foreign securities and we therefore have substantial
exposure to foreign market conditions and are subject to foreign
currency exchange rate risks.
- Many of our ETPs have a limited track record, and
poor investment performance could cause our revenues to
decline.
- We depend on third parties to provide many
critical services to operate our business and our ETPs. The failure
of key vendors to adequately provide such services could materially
affect our operating business and harm our customers.
Other factors, such as general economic
conditions, including currency exchange rate fluctuations, also may
have an effect on the results of our operations. For a more
complete description of the risks noted above and other risks that
could cause our actual results to differ from our current
expectations, please see the section entitled "Risk Factors" in the
Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2016.
The forward-looking statements in this press
release represent our views as of the date of this press
release. We anticipate that subsequent events and developments
may cause our views to change. However, while we may elect to
update these forward-looking statements at some point in the
future, we have no current intention of doing so except to the
extent required by applicable law. Therefore, these
forward-looking statements do not represent our views as of any
date other than the date of this press release.
WisdomTree Contact
Information
Media Relations
WisdomTree Investments, Inc.
Jessica Zaloom
+1.917.267.3735
jzaloom@wisdomtree.com
Investor
Relations
WisdomTree Investments, Inc.
Jason Weyeneth, CFA
+1.917.267.3858
jweyeneth@wisdomtree.com
This
announcement is distributed by Nasdaq Corporate Solutions on behalf
of Nasdaq Corporate Solutions clients.
The issuer of this announcement warrants that they are solely
responsible for the content, accuracy and originality of the
information contained therein.
Source: WisdomTree Investments, Inc. via
Globenewswire
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