(Bloomberg) — Standard Life Plc climbed the most in 11 months after its investment arm agreed to buy Ignis Asset Management for 390 million pounds ($645 million), gaining 59 billion pounds of funds.
The acquisition from Phoenix Group Holdings will increase third-party assets under management by 64 percent, and add to earnings per share in its first full year, the Edinburgh-based insurer said in a statement today. Standard Life Investments, which oversees 184.1 billion pounds, boosted its profitability target for earnings before interest, taxes, depreciation, and amortization to 45 percent by 2017.
Standard Life, Scotland’s biggest insurer, surged as much as 7.1 percent, the most since April. The firm has repositioned itself as a mutual-fund manager and provider of pension products rather than traditional life-insurance policies.
“We view the acquisition as a positive move for Standard Life Investments in a market where size matters,” Barrie Cornes, an analyst at Panmure Gordon & Co., said in a note. “We view the key driver as cost synergies.”
Standard Life also said integrating Ignis will save more than 50 million pounds annually by the third year after the purchase. Standard Life Investments will manage future assets Phoenix accrues under a partnership agreement, passing on 15 percent to 20 percent of the revenue to Phoenix.