Amvescap Buys PE Firm in $375 Million Deal

Jul 28 2006 | 4:38pm ET

Amvescap could hardly have found a bigger name to run its direct private equity business. Buyout giant Wilbur Ross has agreed to sell his six-year-old, $3.5 billion private equity firm, WL Ross & Co., to the U.K. money manager for up to $375 million. As part of the deal, Amvescap's private equity business, Invesco Private Capital, with more than $3 billion in assets under management, will be merged into WL Ross, with Ross heading the new combined entity.

"Wilbur Ross is a recognized leader in financial restructuring," Amvescap President and CEO Martin Flanagan, said. "With his leadership of the company's direct private equity business, Amvescap will be uniquely positioned to deliver alternative investment strategies that provide innovative and enduring investment solutions for our clients."

In a conference call, Ross explained his decision to give up full control of his firm. "It used to be that a few billion dollars was a large private equity fund," he said. "Now it takes $10 billion or $20 billion to get to that level."

Ross added, "I believe this is a pioneering deal in what will likely be quite a number of similar transactions going forward."

The combined WL Ross-Invesco entity will have nearly $7 billion in assets.

London-based Amvescap, which is run out of Atlanta, will pay $100 million for New York-based WL Ross when the deal closes, which is expected to be in the fourth quarter. Ross is then eligible for five annual earn-out payments of up to $55 million each, with a minimum first payment of $30 million.

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