HFA Holding's acquisition of Lighthouse Partners is a step closer following the signing of a purchase agreement between the two parties.
HFA will pay US$348.5 million in cash and 134.67 million HFA shares for the US fund of absolute return funds manager.
The cash component will be funded in part by a loan facility for up to US$130 million and also through a fully underwritten equity raising, to be completed via a 15 per cent placement followed by a two for five renounceable rights issue.
As part of the agreement Lighthouse management will reinvest 50 per cent of the after tax cash proceeds received from the merger back into Lighthouse products over at least a two-year period.
HFA shareholders will meet on December 14 to vote on the issue of the 134.67 million HFA shares earmarked for Lighthouse management in relation to the acquisition. The board of HFA has recommended that shareholders vote in favour of the deal.
The transaction is also subject to US antitrust laws, the appointment of Sean McGould as a director of HFA, Lighthouse management vendors holding at least 29.3 per cent of HFA at deal close, and approval of the Foreign Investment Review Board.
The merger is expected to be completed around March 31, 2008.
