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Franklin Resources (NYSE:BEN), known as Franklin Templeton funds, agreed on Tuesday to acquire Bank of New York Mellon's (NYSE:BK) BNY Alcentra Group, one of the largest European credit and private debt managers for as much as $700M.
Franklin Templeton (BEN) will pay $350M at closing and up to a further $350M depending on the achievement of certain performance levels over the next four years. The transaction, expected to close in Q1 CY2023, will be funded from Franklin Templeton's existing balance sheet and is expected to immediately add to its adjusted EPS.
BEN has also committed to purchase all seed capital investments from BNY Mellon (BK) related to Alcentra which, as of March 31, 2022, were valued at ~$305M.
Alcentra has $38B in assets under management. Through the acquisition, Franklin Templeton's (BEN) U.S. alternative credit specialist investment manager, Benefit Street Partners, will expand its alternative credit capabilities and presence in Europe, doubling its AUM to $77B globally.
"We have been deliberate in building our alternative asset management capabilities over recent years and the acquisition of Alcentra is an important aspect of our alternative asset strategy – the expansion into alternative European credit," said Jenny Johnson, president and CEO of Franklin Templeton.
The transaction will add to Franklin Templeton's (BEN) alternative asset strategies and brings its firmwide AUM to $257B once the deal closes.
Previously (May 3), Franklin Resources (BEN) Q1 AUM dips 6% over prior quarter on market volatility, outflows