Ashmore Group plc
1 June 2011
Completion of acquisition of a majority interest in Emerging Markets Management, L.L.C.
Further to the announcement on 24 February 2011, Ashmore Group plc ("Ashmore") is pleased to announce that it has completed the acquisition of a majority stake (62.9 per cent) in Emerging Markets Management, L.L.C. ("EMM") (the "Acquisition").
Commenting on the Acquisition, Mark Coombs, Ashmore's Chief Executive Officer, said:
"We are very pleased with the strong level of support that we have received from EMM's investors and from our shareholders, both of whom recognise the compelling strategic fit between the two firms."
As at 31 May 2011, EMM had estimated assets under management of approximately US$9.7 billion. In accordance with the terms of the Acquisition, the initial consideration at completion of the Acquisition ("Completion") was subject to an adjustment mechanism. The total consideration for the Acquisition remains US$246 million:
§ Reduction in initial consideration of US$19.0 million to US$81.5 million payable in cash on Completion and US$25.4 million in new ordinary Ashmore shares, or approximately 4.4 million shares, which will be restricted from sale for a period of up to three years post-Completion; and
§ Increase of US$19.0 million in the earn-out consideration to a maximum of US$139.1 million payable in three annual instalments based on the achievement of certain financial targets over the three years following Completion. Earn-out consideration will be payable in a combination of cash and new Ashmore ordinary shares at the prevailing market price, such combination to be determined at Ashmore's discretion.
Admission to listing on the Official List of the UKLA and to trading on the London Stock Exchange's main market for listed securities of the 4,359,437 new Ashmore shares issued in relation to the Acquisition is expected to occur with effect from 8:00 a.m. London time today.
For further information, please contact:
Ashmore Group plc
Ashmore Group plc +44 (0)20 3077 6000
Graeme Dell, Group Finance Director
Gay Collins +44 (0)20 3128 8582/+44(0)7798626282
Jennifer Spivey +44 (0)20 3128 8534
Further information can be found at http://www.ashmoregroup.com/
(1) EMM AuM prepared on the basis of reconciled assets under management, adjusted to include the effect of all notified asset flows as at the specified date.
(2) Following Completion, the total number of Ashmore shares in issue for the purposes of disclosures required to be made pursuant to the Financial Services Authority Disclosure and Transparency Rules (DTR's) is 707,916,106.
Principal accounting impacts
(a) One-off transaction-related costs are estimated at approximately £3 million and will be recognised during the current financial year.
(b) Consolidation into Ashmore's accounts will take effect from today and the EMM financials will be included in the results to 30 June 2011.
(c) Further information will be provided at the time of Ashmore's year end results in September, including details on the non-cash annual amortisation expense related to the acquired intangible assets and the profile of the future unwind of the discount on the contingent consideration.