Legg Mason Inc. (LM:US) will spend as much as $41 million to buy QS Investors, a global quantitative equity firm that split from Deutsche Bank AG in 2010.
The Baltimore-based money manager will pay an initial purchase price of $11 million for New York-based QS Investors, and then an additional maximum of $30 million if certain net revenue targets are met during the second and fourth years following the acquisition, according to a regulatory filing (LM:US) today.
Legg Mason affiliates Batterymarch Financial Management and Legg Mason Global Asset Allocation will be integrated into QS Investors, which has $4.1 billion in funds under management and $100 billion in advisory assets, the company said yesterday in a statement. The transaction (LM:US), expected to close in the quarter ending June 30, will result in restructuring and transition costs of about $35 million.
Joseph A. Sullivan, who was named chief executive officer in February 2013, has reorganized businesses to cut costs while vowing to stem withdrawals by focusing on Legg Mason’s product lineup and improving performance. He has said he wants to fill gaps in global equities, multiasset offerings and alternative investments such as private equity, real estate and natural resources. The firm hired Wells Fargo & Co.’s Thomas Hoops in January to look for potential acquisitions and develop products.
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