Company expands in Brazil with mutual fund and asset management acquisition
DES MOINES, Iowa --(BUSINESS WIRE)--Mar. 1, 2012-- The Principal Financial Group, Inc. (NYSE: PFG), a global retirement and investment management leader, today announced a definitive agreement to purchase a 60 percent indirect ownership of Claritas Administração de Recursos Ltda. / Claritas Investments, Ltd. (Claritas). Price is not being disclosed.
Claritas is a leading Brazilian mutual fund and asset management company with more than R$3.1 billion in assets under management1(US$1.8B). The Sao Paulo - based company manages equity funds, balanced funds, managed accounts and other strategies for affluent clients and institutions through its multi-channel distribution network.
“Entering the Brazilian mutual fund and asset management market has long been a strategic priority for The Principal® and we are pleased to partner with the talented team at Claritas,” said Luis Valdes
, president and CEO of Principal International. “The company’s strong management team, solid investment track record, value added products for Brazilians and potentially international customers, and diversified distribution through financial advisors are all important competencies as we continue to grow our mutual fund and asset management business in Latin America.”
“The strategic partnership with The Principal provides additional resources to the company while preserving our management philosophy and investment culture,” said Carlos Ambrósio, managing partner and head of structured products at Claritas. “With The Principal’s global investment expertise, we can expand our capabilities and provide greater opportunities to clients.”
This is the second business partnership for The Principal in Brazil. Since 1999, The Principal has offered pension and annuity products through Brasilprev, its joint-venture operation with Banco do Brasil. With assets under management of US$27.4 billion2, Brasilprev is currently the fastest-growing and third largest retirement player in Brazil3.
According to Larry D. Zimpleman, chairman, president and CEO of The Principal, “We will continue to deploy capital for acquisitions that are aligned with our focused strategies and complementary to our existing businesses. While Brasilprev and Claritas target different markets, both support our goal to be a pension and long-term investment leader in Brazil.”
This announcement is part of The Principal’s overall plan to deploy $800 to $900 million of capital in 2012 and is in addition to the $154 million planned for the share repurchase and quarterly common stock dividend previously announced.
The Claritas transaction is expected to be earnings per share (EPS) neutral in 2012 and accretive to EPS and return on equity thereafter. The deal is expected to close in April.
Lazard Frères & Co., LLC, advised The Principal on the transaction.
For more news and insights from The Principal, connect with us on Twitter at: http://twitter.com/ThePrincipal.
Forward looking and cautionary statements
This press release contains forward-looking statements, including, without limitation, statements as to operating earnings, net income available to common stockholders, net cash flows, realized and unrealized losses, capital and liquidity positions, sales and earnings trends, and management's beliefs, expectations, goals and opinions. The company does not undertake to update or revise these statements, which are based on a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Future events and their effects on the company may not be those anticipated, and actual results may differ materially from the results anticipated in these forward-looking statements. The risks, uncertainties and factors that could cause or contribute to such material differences are discussed in the company's annual report on Form 10-K for the year ended Dec. 31, 2011, filed by the company with the Securities and Exchange Commission, as updated or supplemented from time to time in subsequent filings. These risks and uncertainties include, without limitation: adverse capital and credit market conditions that may significantly affect the company’s ability to meet liquidity needs, access to capital and cost of capital; continued difficult conditions in the global capital markets and the economy generally, that may materially adversely affect the company’s business and results of operations; the risk from acquiring new businesses, which could result in the impairment of goodwill and/or intangible assets recognized at the time of acquisition; impairment of other financial institutions that could adversely affect the company; investment risks which may diminish the value of the company’s invested assets and the investment returns credited to customers, which could reduce sales, revenues, assets under management and net income; requirements to post collateral or make payments related to declines in market value of specified assets may adversely affect company liquidity and expose the company to counterparty credit risk; changes in laws, regulations or accounting standards that may reduce company profitability; fluctuations in foreign currency exchange rates that could reduce company profitability; Principal Financial Group, Inc.’s primary reliance, as a holding company, on dividends from its subsidiaries to meet debt payment obligations and regulatory restrictions on the ability of subsidiaries to pay such dividends; competitive factors; volatility of financial markets; decrease in ratings; interest rate changes; inability to attract and retain sales representatives; international business risks; a pandemic, terrorist attack or other catastrophic event; and default of the company’s re-insurers.
About the Principal Financial Group
The Principal Financial Group(The Principal®)4 is a global investment management leader including retirement services, insurance solutions and asset management. The Principal offers businesses, individuals and institutional clients a wide range of financial products and services, including retirement, asset management and insurance through its diverse family of financial services companies. Founded in 1879 and a member of the FORTUNE 500®, the Principal Financial Group has $335 billion in assets under management5and serves some 18 million customers worldwide from offices in Asia, Australia, Europe, Latin America and the United States. Principal Financial Group, Inc. is traded on the New York Stock Exchange under the ticker symbol PFG. For more information, visit www.principal.com.
1As of 12/31/2011
2As of 12/31/2011
3Based on assets under management, Fenaprevi (May 2011)
4“The Principal Financial Group” and “The Principal” are registered service marks of Principal Financial Services, Inc., a member of the Principal Financial Group.
5As of Dec. 31, 2011.
Source: Principal Financial Group, Inc
Principal Financial Group, Inc.
Susan Houser, 515-248-2268
Investor Relations Contact:
John Egan, 515-235-9500