Franklin Resources, which operates as Franklin Templeton, has agreed to acquire US-based money management firm Putnam Investments from Canadian financial services holding company Great-West Lifeco in a deal worth around $925m.
The deal has been announced as a part of a collaboration between Franklin Templeton and Power Corporation of Canada, which is the parent company of Great-West Lifeco and IGM Financial.
Under the terms of the agreement, Franklin Templeton will pay about $825m in the form of stock up-front at the closing of the transaction to Great-West Lifeco. In this regard, Franklin Resources will be issuing 33.3 million shares of its common stock to the latter.
Besides, the investment management organisation will pay $100m in cash to Great-West Lifeco after 180 days from the closing of the deal.
Furthermore, the US-based company will pay up to $375m in contingent consideration that will be linked to revenue growth targets from the partnership.
Franklin Templeton president and CEO Jenny Johnson said: “This is a compelling transaction for Franklin Templeton, and we are excited about the numerous opportunities that will be unlocked by this long-term strategic partnership with the Power Group of Companies including Great-West.”
As a part of the transaction, Great-West Lifeco, with a stake of nearly 6.2%, will become a long-term strategic shareholder in Franklin Resources.
The former will also provide an initial long-term asset allocation of $25bn to the specialist investment managers of Franklin Templeton within one year of the closing of the transaction.
Great-West Lifeco president and CEO Paul Mahon said: “This transaction furthers Great-West’s strategy of building strategic partnerships with best-in-class asset managers to support our client’s retirement, insurance, and wealth management needs.
“Franklin Templeton’s scale and breadth, together with Putnam’s capabilities, will drive positive outcomes for our companies, our clients, and our investors.”
The transaction, which is subject to customary conditions, is expected to be completed in Q4 2023.
