Victory Capital to Buy First Eagle in $7 Billion Deal, Combining $571 Billion in Assets
A $7 billion acquisition of First Eagle Investments positions Victory Capital Holdings ($VCTR) for a combined asset base of roughly $571 billion. San Antonio-based Victory will pay $4 billion in cash and issue $2…
Key takeaways
- Victory Capital Holdings agreed to acquire First Eagle Investments in a $7 billion deal, creating a firm with roughly $571 billion in combined assets.
- Victory will pay $4 billion in cash, issue $2 billion in newly created shares, and assume $575 million of First Eagle's senior secured notes due in 2032.
- The merged entity projects annual revenue of about $3.2 billion and roughly $280 million in net expense savings.
- First Eagle's $41 billion CLO and alternative credit platform will become the combined firm's dedicated alternatives arm, while First Eagle retains its brand and runs on Victory's infrastructure.
- The deal comes five months after Victory withdrew a nearly $9 billion bid for Janus Henderson Group Plc.
A $7 billion acquisition of First Eagle Investments positions Victory Capital Holdings ($VCTR) for a combined asset base of roughly $571 billion. San Antonio-based Victory will pay $4 billion in cash and issue $2 billion in newly created shares, and will assume $575 million of First Eagle's senior secured notes due in 2032, per a statement released Wednesday.
First Eagle manages approximately $229 billion. Its $41 billion CLO and alternative credit platform will become the combined firm's dedicated alternatives arm after closing, slotting into Victory's existing multi-asset lineup. The companies put projected annual revenue for the merged entity at roughly $3.2 billion and said the transaction would generate about $280 million in net expense savings. Those figures are the margin story to track: a $280 million cost target against a $3.2 billion revenue base gives the post-close integration a concrete benchmark.
Chairman and Chief Executive Officer David Brown said in the statement that clients will gain access to a broader range of investment capabilities while shareholders will see greater scale and earnings power from the combined platform. First Eagle retains its brand and operates on Victory's infrastructure, an arrangement that preserves distribution relationships built under the First Eagle name. How quickly the firm realizes those cost savings will determine whether the combined revenue base translates to expanded operating margins.
The transaction arrives five months after Victory pulled a nearly $9 billion bid for Janus Henderson Group Plc. Victory had accused Janus Henderson of refusing to engage with its offer and instead accepting what Victory called an inferior proposal from Trian Fund Management and General Catalyst. Investment teams overseeing the majority of Janus Henderson's assets had opposed Victory's approach. First Eagle is a less contested target and a more defined one: the alternatives rationale is explicit from the announcement, the brand and platform structure settled at signing.
Scale and fee pressure are driving consolidation across asset management. The First Eagle deal adds CLO and alternative credit capabilities that did not previously exist on Victory's platform.
PJT Partners was lead financial adviser to Victory Capital, with Willkie Farr & Gallagher as legal counsel. UBS Investment Bank and Ropes & Gray advised First Eagle. A closing date and regulatory review timeline were not included in Wednesday's statement.
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Filed via finance.yahoo.com