MONTREAL, Feb. 1, 2007 – Power Financial Corporation’s subsidiary company, Great-West Lifeco today announced that it will acquire the asset management business of Putnam Investments Trust and The Great-West Life Assurance Company will acquire Putnam’s 25 per cent interest in T.H. Lee Partners. The parties have made an election under section 338(h)(10) of the U.S. Internal Revenue Code that will result in a tax benefit that Lifeco intends to securitize for approximately US $550 million (CDN $644 million). In aggregate these transactions represent a value of US $3.9 billion (CDN $4.6 billion). The transactions are subject to receipt of all required regulatory and unitholder approvals.
Power Financial Corporation has wanted for some time to expand the presence of its financial services group in the United States, by acquiring a strong, well established and respected financial services organization with a broad distribution network. Putnam meets all these criteria.
Established in 1937, Putnam is one of the oldest and largest investment managers in the United States. Putnam had US $192 billion (CDN$225 billion) in assets under management at December 31, 2006. With offices in Boston, London and Tokyo, Putnam’s approximately 3,000 employees manage US $118 billion (CDN$138 billion) in retail assets for US mutual fund investors, US $39 billion (CDN$46 billion) for North American institutional accounts and US $35 billion (CDN$41 billion) of institutional and retail assets in Europe and Japan.
Putnam’s investment management and distribution cover every major product category, all significant channels and all asset classes. One of its units, PanAgora, offers a leading edge quantitative asset management platform. In the United States, Putnam has 9 million shareholder accounts. In Japan it distributes mutual funds through a joint venture with Nippon Life, the largest Japanese insurance company.
The addition of Putnam is expected to bring total assets and assets under administration in the Power Financial group to approximately CDN $520 billion.
The acquisition is expected to be accretive to earnings in the first full year at Great-West Lifeco and at Power Financial. It is anticipated that the transaction will close in the second quarter of 2007. It is subject to regulatory approvals, approval by the holders of shares or units of certain Putnam mutual funds and certain other conditions.
Power Financial Corporation is a diversified management and holding company that has interests, directly or indirectly, in companies that are active in the financial services sector in Canada, the United States and Europe. It also has substantial holdings in a group of energy, water, waste services, specialty minerals and cement and building materials companies based in Europe.Tags: Acquisition, Great-West Life