Invesco Closes MS/Van Kampen Deal – Analyst Blog

Filed in earnings, Gold Investing, shares, silver, sov by on June 2, 2010 0 Comments

On Tuesday, Invesco Limited ( IVZ ) declared the closure of its previously announced deal to acquire the retail asset management business of Morgan Stanley ( MS ), including its Van Kampen division, for $1.5 billion. Specializing in mutual funds and retirement services, Van Kampen is one of the largest investment firms in the U.S. According to the terms, Invesco completed the deal in exchange for a combination of cash and equity, providing Morgan Stanley with $800 million in cash and 30.9 million shares in Invesco. This makes Morgan Stanley the largest shareholder in Invesco. Associating with Invesco will enable Morgan Stanley to unlock good value for its retail asset management business as it will now be able to focus on institutional business such as endowments, sovereign wealth funds, pension plans and central banks, among others. On the other hand, the combination of Invesco’s diversified product portfolio and Van Kampen’s product strengths along with its distribution potential will create a formidable source of retail asset management services. With the completion of the acquisition, Invesco is now better positioned to meet the demands of its clients across the world with more than 700 investment professionals and a comprehensive range of diverse investment strategies. Invesco expects the transaction to be increasingly accretive to its earnings. This transaction is expected to increase the earnings per share by 21 cents in the first year and 23 cents in the second year. Invesco’s first-quarter 2010 earnings came in at 27 cents per share, only a penny ahead of the Zacks Consensus Estimate of 26 cents. This also compares favorably with earnings of 11 cents in the prior-year quarter. Headquartered in Atlanta, Georgia, Invesco operates as an independent investment manager and offers a broad range of investment products and services. We expect significant improvement in operating leverage from Invesco’s expense reduction initiatives. Furthermore, due to its broad diversification, the company should benefit from the improvement in global investment flows. Read the full analyst report on “IVZ” Read the full analyst report on “MS” Zacks Investment Research

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Invesco Closes MS/Van Kampen Deal – Analyst Blog

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