Investment banking firm and independent financial advisory Duff & Phelps Corporation (DUF) went into agreement to be acquired by a private equity consortium including Carlyle Group (CG) for $665.5 million.
Other buyers included Stone Point Capital and Edmond de Rothschild Group. All buyers will pay $15.55 a share, up 19% from the firm’s closing price on Dec. 28.
The transaction is expected to close in the first half of the year. The agreement will help contribute to Duff & Phelps international expansion.
"Duff & Phelps Board of Directors, acting on advice from the Company’s legal and financial advisors, agrees that this transaction is in the best interest of our stockholders, who will receive an immediate and certain cash premium for their shares. Importantly, the transaction will be structured to preserve the firm’s independence as we serve our clients in the future," chief executive officer Noah Gottdiener of Duff & Phelps said.
Ending on Feb. 8, the merger agreement provides for a “go-shop” period, meaning Duff & Phelps can solicit and receive alternative proposals. If Duff & Phelps were to get a higher bid, the firm would have to pay a break-up fee of $6.65 million and end the current agreement before March 8.
"Regulatory demands, implementation of new accounting policies and requirements for increased corporate disclosure and third party validation provide significant growth opportunities for Duff & Phelps core products and services. We will harness Carlyle’s and Stone Point’s global networks while leveraging Duff & Phelps preeminent brand to foster growth in new geographies," managing director and head Olivier Sarkozy of Carlyle Global Financial Servicers Group.
He added, "Additionally, we believe the involvement of Pictet and Edmond de Rothschild Group will support the Company’s initiatives to enhance its international presence and expand its Limited Partner client base. We are excited to work with Noah and his management team on this opportunity."
All members of the senior management team have agreed to remain employed by as well as in invest in the equity of Duff & Phelps following the closing of the transaction.