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Old Mutual to close £183 million US deal this month

Old Mutual to close £183 million US deal this month

Old Mutual to close £183 million US deal this month

Old Mutual, the British insurer breaking up its business into four separate units, is expected to close a deal this month with US investment firm Landmark Partners.

The insurance company announced in June that it had signed an agreement to acquire 60% of Landmark Partners, a leading global secondary private equity, real estate and real asset firm.

“We expect to complete the transaction this month and look forward to collaborating with the Landmark team to further grow and diversify their business and expand their distribution capabilities outside of the US,” the insurer said in a new statement.

Old Mutual Asset Management (OMAM) will pay about US$240 million for the investment firm and may make an additional payment based on the growth of the business by 2018.

The UK firm will pay for the unit from an existing credit facility or may seek other sources of debt financing. OMAM revealed this development as it announced its latest financial results.

The company posted a net income of US$36.3 million for the second quarter and US$67.1 million for the first half of 2016, down by 26.5% and 19.7% respectively from the same periods last year.

“In the second quarter, we continued to make progress executing on our strategy, as we positioned our business for long-term growth by diversifying our franchise through our agreed investment in Landmark Partners,” said OMAM CEO Peter Bain.

In a separate statement, Old Mutual confirmed that it entered into exclusive negotiations with European private equity fund Cinven for the potential sale of the insurer’s Italian wealth business. However, the insurer clarified that “there can be no certainty that these negotiations will lead to any transaction.”

Reuters reported earlier this week that Old Mutual was planning to wrap up the deal by the end of August. Cinven reportedly emerged as the final buyer and will acquire the Old Mutual subsidiary for about US$335 million.


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