UMB Financial Corporation announced today the execution of an agreement to sell 100 percent of the stock of Scout Investments, Inc. (Scout), its institutional investment management subsidiary with $27.3 billion in assets under management (as of Dec. 31, 2016), to Carillon Tower Advisers, a unit of Raymond James Financial, for $172.5 million in cash, subject to purchase price adjustments at closing. The company plans to use the proceeds from the transaction to support its current growth strategies.
“The decision to sell Scout Investments comes at a time when our company has evolved,” said Mariner Kemper, chairman and CEO of UMB Financial Corporation. “This transaction allows us to invest more time, energy and capital resources into our core businesses. We’re excited by this opportunity and what it means to be a relationship-based, diversified financial services company with a focus on enhancing long-term profitability.”
Kemper continued, “At the core of our business model is diversified revenue, with noninterest income from the Bank and Fund Services representing 44.7 percent of their combined total revenue in 2016, compared to 27.9 percent median from our peers. Scout has been an integral part of our company for more than 30 years, and we believe we have found the right partner for them in Carillon Tower Advisers, whose sole focus is on institutional-quality investment management, and brings enhanced distribution capabilities and scale to Scout.”
The transaction has been approved by the boards of directors at both companies, is anticipated to close by the end of the calendar year and is subject to customary closing conditions, including mutual fund board approval and consents of the mutual fund shareholders and certain advisory clients. Both companies will continue to conduct business as usual in the interim.
RBC Capital Markets LLC served as exclusive financial advisor and Stradley Ronon Stevens & Young, LLP served as legal counsel to UMB in this transaction. Norton Rose Fulbright served as legal counsel to Carillon Tower Advisers, a unit of Raymond James Financial, with David Barrett serving as lead partner.
