Franklin Templeton Investments of San Mateo, Calif. will acquire Fiduciary Trust International of New York for $825 million in stock, forming a company with $280 billion in assets under management, the companies announced last week.
The acquisition will give Franklin Templeton greater access to the high-net-worth market, said Charles B. Johnson, chairman and chief executive officer of Franklin Templeton.
"Fiduciary manages approximately $14 billion for high-net-worth individuals and families, averaging $12 million per account," Johnson said in a statement. "We plan to offer Fiduciary's global growth products to the retail channel, as well as explore how we can provide Fiduciary's value-added services, such as estate and trust planning, to our investment advisor clients."
Fiduciary Trust manages investments for public funds, corporations, foundations, endowments and 1,000 wealthy families, according to the companies. The firm manages an estimated $50 billion in assets and employs 700 people in nine countries. As part of the agreement, some Fiduciary employees have signed long-term contracts with Franklin Templeton, the company said.
Franklin Templeton had $230 billion in assets under management as of Sept. 30. It employs 6,500 people in more than 25 countries.
Under the terms of the agreement, which is expected to close sometime in the first quarter of next year, Franklin Templeton will pay Fiduciary Trust shareholders $113.38 per share, a 74.4 percent premium to Fiduciary Trust's Oct. 24 closing stock price.