Franklin Resources To Buy Legg Mason For $50/Shr In All-cash Deal – Quick Facts
Franklin Resources, Inc. (BEN), a global investment management organization operating as Franklin Templeton, agreed Tuesday to acquire Legg Mason, Inc. (LM) for $50.00 per share of common stock in an all-cash transaction of $4.5 billion.
Franklin Templeton will also assume approximately $2 billion of Legg Mason’s outstanding debt. The company will fund the cash consideration from its existing balance sheet cash.
The acquisition of Legg Mason and its multiple investment affiliates, which collectively manage over $806 billion in assets as of January 31, 2020, will establish Franklin Templeton as one of the world’s largest independent, specialized global investment managers with a combined $1.5 trillion in assets under management (AUM) with presence in key geographies.
With this acquisition, Franklin Templeton will preserve the autonomy of Legg Mason’s affiliates, ensuring that their investment philosophies, processes and brands remain unchanged.
Following the closing of the transaction, Jenny Johnson will continue to serve as president and CEO, and Greg Johnson will continue to serve as executive chairman of the Board of Franklin Resources, Inc. There will be no changes to the senior management teams of Legg Mason’s investment affiliates. Global headquarters will remain in San Mateo, CA and the combined firm will operate as Franklin Templeton.
This transaction is expected to generate upper twenties percentage adjusted earnings accretion in Fiscal 2021, excluding one-time charges, non-recurring and acquisition related expenses.
The majority of the expected $200 million in annual cost savings are expected to be realized within a year, following the close of the transaction, with the remaining synergies being realized over the next one to two years.
The transaction has been unanimously approved by the boards of Franklin Resources, Inc. and Legg Mason, Inc. This transaction is subject to customary closing conditions, including receipt of applicable regulatory approvals and approval by Legg Mason’s shareholders, and is expected to close no later than the third calendar quarter of 2020.
Trian Fund Management, L.P. and funds managed by it, which collectively own approximately 4 million shares or 4.5% of the outstanding stock of Legg Mason, have entered into a voting agreement in support of the transaction.
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