Jonathan Steinberg, CEO of WisdomTree Investments, has said its purchase of ETF Securities' European business will add scale, diversification and profitability to the business.
The group announced today it is set to acquire ETF Securities' $17.6bn European exchange-traded commodity, currency and short-and-leveraged business for an expected $611m, subject to regulatory approval. Having agreed terms, the sale is expected to complete in March 2018.
Business included in the deal comprises the whole of the European operation excluding the ETF platform Canvas, totalling 342 products and 43 staff.
The move will bring WisdomTree's total assets under management (AUM) to $66bn, making it the ninth largest ETP provider globally. WisdomTree's existing product range in Europe consists of 17 UCITS ETFs with $839m AUM and 68 Boost ETPs with $937m AUM.
David Abner, head of Europe at WisdomTree, will head up the combined operation in Europe when the deal completes, with the firm stating it will select the "best of the best" personnel from both businesses going forwards.
It added Graham Tuckwell, chairman and founder of ETF Securities, was looking to exit the business in order to focus on his "philanthropy efforts", which was why the majority of his shares were non-voting.
Commenting on the deal, Jonathan Steinberg, CEO and president of WisdomTree, said: "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.
"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."
WisdomTree CFO Amit Muni said: "The deal enhances our scale within the marketplace. The combined firm will have a broad European product suite in a sophisticated distribution network with strong geographic reach, which we expect to accelerate the growth of our existing products."
Mark Weeks, UK CEO of ETF Securities, said: "This transaction creates a leading independent global ETP provider which is well positioned to compete in the rapidly growing European ETP market. We have complementary expertise, product ranges and customer networks.
"We both continue to challenge the status quo to provide customers with a range of differentiated products. In this industry, customers want and value firms like ours, which provide broader choice."
Credit Suisse is expected to act as the exclusive financial advisor to WisdomTree, while Goodwin Procter will serve as the firm's legal counsel.
The deal is the latest acquisition in the ETF space this year, following Invesco's purchase of both Source ETF, to sit alongside its existing PowerShares business, and then Guggenheim Investments' smart-beta ETF range in a $1.2bn deal.
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