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September 03, 2002 at 08:00 PM
Aug. 29, 2002 — Waddell & Reed Financial (WDR) said it agreed to acquire Mackenzie Investment Management Inc. (MIMI), the U.S. investment management subsidiary of Mackenzie Financial Corp. (MFC), adviser to the Ivy funds.
Under terms of the agreement, Waddell & Reed will pay $30 million to purchase Florida-based MIMI, plus the amount of excess working capital, subject to certain adjustments relating primarily to assets under management and to excess working capital at closing. The transaction is expected to have a total value of about $74 million.
Based in Toronto, MFC also sells a different family of funds in Canada under the `Ivy funds’ label. Those funds, however, are not included in this transaction.
MFC, which owns 85.7% of MIMI, has agreed to vote its shares in favor of the transaction. As part of the deal, Waddell & Reed and MFC also will enter into sub-advisory and marketing agreements extending MFC’s existing sub-advisory agreements with MIMI — and, by extension going forward, with Waddell & Reed. The agreements also provide Waddell & Reed additional investment management opportunities in Canada.
As of July 31, 2002, MIMI had $2.1 billion in assets under management, including $756 million in the seventeen Ivy funds. Another $1.3 billion are represented by sub-advisory assets, principally in MFC’s Universal Funds family, which are offered only in Canada.
As of July 31, MFC had a total of $31.3 billion (Can.) in mutual-fund assets under management. MFC’s ultimate parent organization is Power Financial Corp.
In a press release, Keith Tucker, chairman of Waddell & Reed, said the transaction will provide his firm with “substantial sub-advisory assets and future sub-advisory opportunities in Canada; broad U.S. retail distribution that will enhance our U.S. nonproprietary sales efforts.”
