Acquisition Will Broaden Managed Account Product Line
The deal, expected to close by Oct. 31, provides for an additional $30 million in payments in 2005 and 2006, depending on 'certain financial performance criteria.' The additional payment is an incentive to Fox principals and is contingent upon sound financial performance in the coming years, said Meg Pier, a company spokesperson.
Fox, an independent management firm that focuses on separately managed accounts for institutions and broker-dealer consultant programs, will become a subsidiary of Eaton Vance and will operate as a distinct business unit.
Eaton Vance CEO James Hawkes said in a statement that his company was attracted to the deal at least partly because of Fox's focus on managed accounts, which posted an annual growth rate of 33.4% during the past three years compared to the mutual fund industry, which grew at less than half that rate.
The agreement, which has been approved by the boards of both companies, will allow Fox principals to hold the remaining 20% of Fox equity through 2006. By 2007, those principals will have the right to sell and Eaton Vance will have the option to purchase the shares over a five-year period.
As of June 30, Eaton Vance had $50 billion in assets under management and Fox had $2 billion.