Victory Capital Agrees to Buy First Eagle in $7 Billion Deal

Victory Capital Holdings Inc. has reached an agreement to acquire First Eagle Investments for $7 billion, creating a combined firm with assets under management totaling approximately $571 billion. The deal, which includes $4 billion in cash and $2 billion in newly issued shares, also involves the assumption of $575 million in First Eagle's senior secured notes due in 2032.

This acquisition is part of a larger trend in the asset-management industry, where firms are consolidating to expand their offerings and grow their scale amid a fee squeeze. First Eagle, currently managing $229 billion, will bring scaled CLO and alternative credit to Victory's multi-asset products.

Victory's Chairman and Chief Executive Officer, David Brown, highlighted that the deal will provide clients with a broader range of investment capabilities and more extensive resources, while also enhancing the earnings power of the combined company. The acquisition follows Victory's withdrawal of a $9 billion bid for Janus Henderson Group Plc five months ago, citing opposition from Janus' investment teams.

Upon completion, First Eagle will operate under Victory Capital's platform and retain its brand. The combined company will generate annual revenue of about $3.2 billion and will realize approximately $280 million in net expense synergies. Financial advisers for Victory Capital include PJT Partners, and legal counsel is provided by Willkie Farr & Gallagher. First Eagle's legal guidance comes from UBS Investment Bank and Ropes and Gray.