Great-West Lifeco to Allocate Initial $25
Billion of AUM to Franklin Templeton, Expanding Long-Term
Relationship with the Power Group of Companies
Great-West Lifeco to Become Long-Term Strategic
Shareholder of Franklin Resources, Inc.
Franklin Templeton to Acquire Putnam
Investments
Adds Complementary Investment Capabilities with
Strong Performance
Accelerates Franklin Templeton’s Growth in the
Retirement Sector and Significantly Increases Franklin Templeton’s
Defined Contribution AUM to Approximately $90 Billion
Franklin Resources, Inc. [NYSE:BEN], a global investment
management organization operating as Franklin Templeton, today
announced a strategic partnership with Power Corporation of Canada
(“Power” and, together with its subsidiaries, the “Power Group of
Companies”) [TSX:POW] and Great-West Lifeco, Inc. (“Great-West”)
[TSX:GWO]. The Power Group of Companies including Great-West and
IGM Financial (“IGM”) [TSX:IGM] are leaders in the global
insurance, retirement, asset management and wealth management
sectors and have collective assets under management and/or
administration (“AUM/AUA”) of approximately $2.1 trillion1.
Great-West includes Empower in the US as well as Canada Life in
Canada and Irish Life in Europe. IGM encompasses subsidiaries
Mackenzie Financial and IG Wealth Management and also has
investments in Rockefeller Capital Management and China Asset
Management Co.
As a foundation of the partnership, Franklin Templeton has
entered into a definitive agreement to acquire Putnam Investments
(“Putnam”) from Great-West for approximately $925 million2 of
primarily equity consideration. Great-West will become a long-term
strategic shareholder in Franklin Resources, Inc., with an
approximate 6.2% stake, consistent with Great-West’s continuing
commitment to asset management.
Great-West will provide an initial long-term asset allocation of
$25 billion to Franklin Templeton’s specialist investment managers
within 12 months of closing with that amount expected to increase
over the next several years. The strategic partnership aligns with
Franklin Templeton’s focus to further grow insurance client assets,
and significantly broadens the relationship between Franklin
Templeton and the Power Group of Companies in key areas of
retirement, asset management and wealth management.
Founded in 1937, Putnam is a global asset management firm with
$136 billion3 in AUM as of April 2023. Putnam has offices in
Boston, London, Munich, Tokyo, Singapore and Sydney. Putnam’s
complementary capabilities and track record of strong investment
performance accelerates Franklin Templeton’s growth in the
retirement markets by increasing its defined contribution AUM and
expanding its insurance assets, while adding further scale and
efficiency to Franklin Templeton’s mutual fund platform. Consistent
with Franklin Templeton’s previous acquisitions, the execution plan
is designed to minimize disruption to Putnam’s investment teams and
client relationships.
“This is a compelling transaction for Franklin Templeton, and we
are excited about the numerous opportunities that will be unlocked
by this long-term strategic partnership with the Power Group of
Companies including Great-West,” said Jenny Johnson, President and
CEO of Franklin Templeton. “Power and Great-West are global leaders
across financial services, particularly in the wealth, insurance
and retirement channels. With outstanding investment performance,
Putnam will add complementary capabilities to our existing
specialist investment managers to meet the varied needs of our
clients and will increase Franklin Templeton’s defined contribution
AUM. We are pleased to welcome Great-West as a strategic investor,
along with the impressive team at Putnam.”
“Franklin Templeton is a leading global asset management firm,
whose business model is well-positioned to build upon the
investment and distribution strengths of Putnam,” said R. Jeffrey
Orr, Chair of Great-West, and President and CEO of Power. “We are
pleased to enter a partnership with Franklin Templeton that will be
mutually beneficial to clients and our respective businesses.”
“This transaction furthers Great-West’s strategy of building
strategic partnerships with best-in-class asset managers to support
our client’s retirement, insurance, and wealth management needs,”
said Paul Mahon, President and CEO of Great-West. "Franklin
Templeton’s scale and breadth, together with Putnam’s capabilities,
will drive positive outcomes for our companies, our clients, and
our investors.”
“Critical to this transaction is the strong alignment between
our organizations. We share a client-centric culture, a core belief
in active management, a collaborative and research-based investment
approach, and a long-held commitment to fundamental investment
principles,” said Robert Reynolds, President and CEO of Putnam. “We
look forward to joining Franklin Templeton in this next phase of
our growth, as we come together to serve our clients, upholding our
commitment to them and their needs.”
Transaction Details
The transaction is structured to maintain Franklin Templeton’s
financial flexibility and enhance continued investment across the
firm. Franklin Templeton will pay approximately $825 million2 in
stock consideration up-front at closing and $100 million in cash
180 days after closing for 100% of Putnam. Franklin Resources, Inc.
will issue 33.3 million shares of its common stock to Great-West,
26.2 million of these shares, representing 4.9% of Franklin
Resources, Inc.’s outstanding common stock, are subject to a 5-year
lock-up, and the remaining shares are subject to a 180-day
lock-up.
In addition, Franklin Templeton will pay up to $375 million in
contingent consideration tied to revenue growth targets from the
partnership.
The transaction is expected to be modestly accretive to run-rate
adjusted EPS by the end of the first year after closing, inclusive
of cost synergies and is anticipated to close in the fourth
calendar quarter of 2023, subject to customary closing
conditions.
An investor presentation on the transaction is available via
investors.franklintempleton.com.
Ardea Partners LP served as lead financial advisor and
Broadhaven Capital Partners LLC provided financial advice to
Franklin Templeton. Willkie Farr & Gallagher LLP served as
legal counsel.
1. As of 03/31/23 per Power Corp. of Canada 1Q 2023 Report,
exchange rate between CAD / USD as of 03/31/23 per FactSet. 2.
Based on stock price as of close of May 30, 2023. Includes
approximately $825mm of Franklin Resources common stock plus $100mm
to be paid in cash 180 days after close. 3. Excludes $33 billion
AUM of PanAgora, which is not a party to the transaction.
Conference Call Information
Executives from Franklin Templeton to lead a live teleconference
today at 9:00 a.m. Eastern Time. Access to the teleconference will
be available via investors.franklinresources.com or by dialing (+1)
888-886-7786 in North America or (+1) 416-764-8658 in other
locations using access code 59788741. A replay of the
teleconference can also be accessed by calling (+1) 877-674-7070 in
North America or (+1) 416-764-8692 in other locations using access
code 788741# through Wednesday, June 7, 2023, or via
investors.franklinresources.com.
About Franklin Templeton
Franklin Resources, Inc. [NYSE:BEN] is a global investment
management organization with subsidiaries operating as Franklin
Templeton and serving clients in over 155 countries. Franklin
Templeton’s mission is to help clients achieve better outcomes
through investment management expertise, wealth management and
technology solutions. Through its specialist investment managers,
the company offers specialization on a global scale, bringing
extensive capabilities in fixed income, equity, alternatives and
multi-asset solutions. With offices in more than 30 countries and
approximately 1,300 investment professionals, the California-based
company has over 75 years of investment experience and
approximately $1.4 trillion in assets under management as of April
30, 2023. For more information, please visit
franklinresources.com.
About Power Corporation of Canada
Power Corporation is an international management and holding
company that focuses on financial services in North America, Europe
and Asia. Its core holdings are leading insurance, retirement,
wealth management and investment businesses, including a portfolio
of alternative asset investment platforms. To learn more, visit
www.PowerCorporation.com.
About Great-West Lifeco Inc.
Great-West Lifeco is an international financial services holding
company with interests in life insurance, health insurance,
retirement and investment services, asset management and
reinsurance businesses. We operate in Canada, the United States and
Europe under the brands Canada Life, Empower, Putnam Investments,
and Irish Life. At the end of 2022, our companies had approximately
31,000 employees, 234,500 advisor relationships, and thousands of
distribution partners – all serving over 38 million customer
relationships across these regions. Great-West Lifeco trades on the
Toronto Stock Exchange (TSX) under the ticker symbol GWO and is a
member of the Power Corporation group of companies. To learn more,
visit greatwestlifeco.com.
About Putnam Investments
Founded in 1937, Putnam Investments is a global money management
firm with over 85 years of investment experience. At the end of
January 2023, Putnam had over US$170 billion in assets under
management. Putnam has offices in Boston, London, Munich,
Singapore, Sydney and Tokyo. For more information, visit
putnam.com.
Forward-Looking Statements
Statements in this press release that are not historical facts
are “forward-looking statements” within the meaning of the U.S.
Private Securities Litigation Reform Act of 1995. When used in this
press release, words or phrases generally written in the future
tense and/or preceded by words such as “will,” “may,” “could,”
“expect,” “believe,” “anticipate,” “intend,” “plan,” “seek,”
“estimate,” “preliminary” or other similar words are
forward-looking statements.
Various forward-looking statements in this press release relate
to the strategic relationship between Franklin Resources, Inc.
(“Franklin”), Great-West, the Power Group of Companies and the
acquisition by Franklin of Putnam from Great-West including
regarding expected growth, client and stockholder benefits, key
assumptions, timing of closing of the transaction, revenue
realization, financial benefits or returns, accretion and
integration costs. Forward-looking statements involve a number of
known and unknown risks, uncertainties and other important factors,
some of which are listed below, that could cause actual results and
outcomes to differ materially from any future results or outcomes
expressed or implied by such forward-looking statements. Important
transaction related and other risk factors that may cause such
differences include: (i) the occurrence of any event, change or
other circumstances that could give rise to the termination of the
acquisition agreement or the strategic relationship; (ii) the
transaction closing conditions may not be satisfied in a timely
manner or at all, including due to the failure to obtain regulatory
and client approvals; (iii) the announcement and pendency of the
acquisition may disrupt Putnam’s business operations (including the
threatened or actual loss of employees, clients or suppliers); (iv)
Franklin, Putnam or Power Group of Companies could experience
financial or other setbacks if the transaction or strategic
relationship encounters unanticipated problems; and (v) anticipated
benefits of the acquisition or the strategic relationship,
including the realization of revenue, accretion, and financial
benefits or returns, may not be fully realized or may take longer
to realize than expected.
Forward-looking statements involve a number of known and unknown
risks, uncertainties and other important factors that may cause
actual results and outcomes to differ materially from any future
results or outcomes expressed or implied by such forward-looking
statements, including market and volatility risks, investment
performance and reputational risks, global operational risks,
competition and distribution risks, third-party risks, technology
and security risks, human capital risks, cash management risks, and
legal and regulatory risks. For a detailed discussion of other risk
factors, please refer to Power’s and Great-West’s recent filings,
which are available for viewing at www.sedar.com, and Franklin’s
recent filings with the U.S. Securities and Exchange Commission
(“SEC”), including, without limitation, those discussed under the
headings “Risk Factors” and “Quantitative and Qualitative
Disclosures About Market Risk” in Franklin’s most recent Annual
Report on Form 10-K and subsequent periodic and current
reports.
Any forward-looking statement made in this press release speaks
only as of the date on which it is made. Factors or events that
could cause actual results to differ may emerge from time to time,
and it is not possible for us to predict all of them. Franklin,
Putnam and Power Group undertake no obligation to publicly update
any forward-looking statement, whether as a result of new
information, future developments or otherwise, except as may be
required by law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230531005507/en/
Investor Relations: Selene Oh, (650) 312-4091,
selene.oh@franklintempleton.com Corporate Communications: Matt
Walsh, (650) 312-2245, matthew.walsh@franklintempleton.com Lisa
Gallegos, (510) 910-2023, lisa.gallegos@franklintempleton.com
Power Corp of Canada (TSX:POW)
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から 12 2023 まで 12 2024
