WisdomTree Investments is to acquire ETF Securities' European exchange-traded commodity, currency and short-and-leveraged business, which includes $17.6 billion of assets under management (AUM) as of 9 November 2017.
With the addition of the acquired business, WisdomTree's assets under management would total approximately $66 billion globally on a pro-forma basis, as of 9 November 2017.
Under the terms of the agreement, WisdomTree will exchange $253 million of cash and stock consideration of 30 million WisdomTree shares for the acquired business. Based on Friday's market close price, the total consideration is valued at $611 million. Excluding one-time transaction and integration costs, WisdomTree expects that the acquisition will be immediately accretive to its earnings per share.
"We are very excited to meaningfully expand and enhance our presence and capabilities in the European market by adding ETF Securities' market-leading commodity platform to WisdomTree's differentiated European product offering," said Jonathan Steinberg, WisdomTree chief executive and president. "The acquisition will immediately add scale, diversification and profitability to our business in Europe, the second largest ETF market in the world and a growing and strategically important region for us and the entire industry. The addition of this complementary and competitively positioned commodity business is an important development in WisdomTree's strategy to establish itself as a differentiated and diversified ETP provider that can thrive globally and generate long-term shareholder value."
"Over the past 14 years, ETF Securities has built established market positions and a leading brand in the specialized ETP market," said Graham Tuckwell, ETF Securities chairman and founder. "Our best in class commodity and currency ETP suite - including Europe's first gold product - has a proven track record of innovation, and has allowed us to develop a highly attractive and diversified institutional, intermediary and retail client base. Our European ETP business and WisdomTree's global business are enormously complementary and the combined business will undoubtedly be a well-diversified, highly innovative force in the industry and best positioned to serve investors' evolving needs."
WisdomTree Investments, through its subsidiaries in the US, Europe, Japan and Canada, is an ETF and ETP sponsor and asset manager headquartered in New York. WisdomTree offers products covering equities, fixed income, currencies, commodities and alternative strategies.