Legg Mason takes control of RARE
Legg Mason is to acquire a controlling stake in RARE Infrastructure.
The transaction has been announced to the Australian Securities Exchange (ASX) with the major shareholders Treasury Group and Northern Lights announcing they had entered into a binding sale and purchase agreement.
It said the transaction had a total consideration of approximately $200 million, including upfront cash proceeds of $112 million, an earn-out of up to $42 million and a 10 per cent retained equity interest in RARE that is subject to a put/call arrangement after two years.
Commenting on the transaction, Treasury Group chief executive, Andrew McGill said that it crystalised an outstanding investment return for his company's shareholders and that the proceeds would be used to repay debt and fund new investments.
The ASX announcement said that Legg Mason was well placed to fund and support the future growth potential of RARE through the leverage of its strong retail distribution network in the US and Europe.
The announcement said RARE management would continue to hold a 15 per cent equity interest in RARE and would continue to run the investment strategy.
The transaction is expected to be completed by the end of October.
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