A press release Friday morning entitled, "Federated Investors, Inc. to Acquire $17 billion in Money Market Assets from RidgeWorth Capital Management," says, "Federated Investors, Inc., one of the nation's largest investment managers, reached a definitive agreement with SunTrust Banks, Inc. to transition approximately $17 billion in money market assets to Federated. The assets are currently managed by SunTrust's RidgeWorth Capital Management Inc. and its subsidiary StableRiver Capital Management LLC."
The release continues, "In connection with this business transaction, money market assets currently managed in nine RidgeWorth money market mutual funds will be transitioned into six existing Federated money market mutual funds with similar investment objectives. Certain assets maintained by SunTrust Bank in collective and common funds also will be transitioned to Federated money market mutual funds. The transaction is expected to occur through a series of closings by year-end."
J. Christopher Donahue, Federated's president and chief executive officer, says, "As a leading provider of liquidity management services, Federated regularly works with organizations of many types and sizes as they evaluate their cash management needs. The transition builds on Federated's long-term relationship with SunTrust by providing current SunTrust clients access to Federated's impressive breadth of products, experienced money managers, proven credit process and extensive customer-service capabilities."
The release adds, "The board of directors of Federated Investors, Inc., has approved the transaction. The transition of assets from the RidgeWorth funds to the Federated funds is expected to be completed through various consent processes. The transaction is also subject to normal and customary approvals. Federated Investors, Inc. is one of the largest investment managers in the United States, managing nearly $350 billion in assets as of March 31, 2010. With 137 funds and a variety of separately managed account options, Federated provides comprehensive investment management to nearly 5,300 institutions and intermediaries including corporations, government entities, insurance companies, foundations and endowments, banks and broker/dealers. For more information, visit FederatedInvestors.com."
Federated comments in an 8-K filing, "This transaction, which is expected to occur through a series of closings by December 31, 2010, includes upfront cash payments that could total up to $8.75 million due at the transaction closing dates. Based on asset levels as of May 31, 2010, the upfront cash payments would total $7.9 million. The transaction also includes contingent purchase price payments payable over five years. The contingent purchase price payments will be calculated as a percentage of revenue less operating expenses directly attributed to certain eligible assets. Based on asset levels as of May 31, 2010, these additional payments would total approximately $30 million over five years."
Crane Data's latest Money Fund Intelligence XLS shows RidgeWorth as the 22nd largest manager of money funds with $15.7 billion. A combined Federated/RidgeWorth complex would still rank as the third largest manager of U.S. money market mutual funds (behind Fidelity and J.P. Morgan) with $239 billion. To see a listing of current RidgeWorth money funds, ask to see our latest Money Fund Intelligence or MFI XLS.
