John Hathaway and Tocqueville Gold Team to Join Sprott
- Sprott Inc. and Tocqueville Asset Management LP have entered into a definitive agreement regarding the sale of Tocqueville’s gold strategy asset management business to Sprott Asset Management
- The Tocqueville gold investment team comprised of Senior Portfolio Manager John Hathaway and Portfolio Managers Douglas Groh and Ryan McIntyre will join Sprott Asset Management on closing
- Based on current asset levels, the transaction will potentially add US$1.9 billion (C$2.5 billion) to Sprott’s AUM1
- The Agreement contemplates the transfer to Sprott of the responsibility to manage or sub-advise the gold strategies currently managed or sub-advised by the Tocqueville gold investment team for various Tocqueville clients including the Tocqueville Gold Fund (TGLDX) and certain other institutional accounts
- Subject to security holder approval for certain acquired strategies, regulatory and stock exchange approvals and other customary conditions to closing, the transaction is currently expected to close in January 2020
TORONTO and NEW YORK, Aug. 07, 2019 (GLOBE NEWSWIRE) -- Sprott Inc. (SII.TO) ("Sprott") and Tocqueville Asset Management (“Tocqueville”) today announced that Sprott Asset Management LP (“SAM”) and Tocqueville have entered into a definitive agreement regarding the acquisition by SAM of the Tocqueville gold strategies.
“We are pleased to be acquiring Tocqueville’s gold strategy asset management business,” said Whitney George, President of Sprott. “John Hathaway and his team are among the world’s most respected gold equities managers and we have enjoyed an excellent working relationship during the planning and launch of our joint venture over the past year. This transaction is a natural extension of that partnership, through which John will become a Sprott shareholder. We look forward to working closely together to serve our clients.”
“We believe that this transaction is an excellent fit for our mutual fund shareholders and our clients,” said Robert W. Kleinschmidt, President, CEO and CIO of Tocqueville. “It ensures us continued participation in the gold space, as well as access to the best investment talent and resources in the sector. We look forward to partnering with Sprott in this endeavor and to developing closer ties between the two firms in the future.”
“Sprott has a globally recognized brand with a dedicated precious metals platform and a long history in the sector,” said John Hathaway, Senior Portfolio Manager of Tocqueville. “We share a similar world view and investment philosophy and believe our clients will benefit from access to Sprott’s team of technical experts and investment professionals.”
“Based on current asset levels, this transaction is expected to add US$1.9 billion (C$2.5 billion) in assets under management (AUM) to our managed equities platform,” said Peter Grosskopf, CEO of Sprott. “The addition of these strategies will complement our other resource investment and financing businesses, expand our global footprint and allow us to service clients in all major gold markets.”
Additional Details Regarding the Proposed Transaction
The proposed transaction remains subject to security holder approval for certain acquired strategies, regulatory and stock exchange approvals, including listing approval of the Toronto Stock Exchange for the issuance of Sprott common shares to Tocqueville, and other customary conditions to closing, following which it would be expected to close in January 2020.
In consideration for the acquisition of the Tocqueville gold strategies, Sprott will pay Tocqueville total consideration of up to US$50 million comprised of a payment at closing of US$10 million in cash and Sprott common shares valued at US$5 million. Tocqueville will also be eligible to receive contingent consideration valued at up to an additional US$30 million in cash and Sprott common shares valued at US$5 million, subject to the achievement of certain financial performance conditions over the two years following the closing of the proposed transaction. The terms and conditions of the definitive agreement are customary for transactions of this nature and Sprott will use cash on hand to finance the cash portion of the purchase price. Approval of Sprott shareholders will not be required.
Sprott is an alternative asset manager and a global leader in precious metal and real asset investments. Through its subsidiaries in Canada, the US and Asia, Sprott is dedicated to providing investors with best-in-class investment strategies that include Exchange Listed Products, Lending, Managed Equities and Brokerage. Sprott is based in Toronto with offices in New York, Carlsbad and Vancouver and its common shares are listed on the Toronto Stock Exchange under the symbol (SII.TO). For more information, please visit www.sprott.com.
The Tocqueville Trust was organized as an open-end management company in 1986 to hold the Tocqueville Fund, which launched in 1987. Over the next several decades, complementary funds were added to create the Tocqueville Family of Funds (“the Funds”). Tocqueville Asset Management L.P. (“TAM”) provides investment management and advisory services to all of the Funds. TAM has been managing institutional and private client accounts since its founding in 1985 with a focus on growing and preserving clients’ long-term capital. The experienced investment professionals of TAM manage accounts, including the Funds, utilizing independent thinking and rigorous research. For more information, please visit www.tocquevillefunds.com.
Forward Looking Statements
This press release contains statements that constitute "forward-looking information" (collectively, “forward-looking statements”) within the meaning of applicable securities laws. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. In particular, but without limiting the forgoing, this press release contains forward-looking statements pertaining to the acquisition of the Tocqueville gold strategies asset management business, including that the transaction will be completed and the timing thereof, the AUM to be added as a result of the transaction, certain portfolio managers joining SAM upon the completion of the transaction and the impact of the transaction on Sprott’s business and strategies. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Sprott to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such risks and uncertainties include, without limitation, risk and uncertainties that are inherent in the nature of the transaction, including: failure to realize anticipated synergies; risks regarding integration; incorrect assessments of the values of the acquired assets; and failure to obtain any required security holder, regulatory, stock exchange and other approvals (or to do so in a timely manner). The anticipated timeline for completion of the transaction may change for a number of reasons, including the inability to secure necessary security holder, regulatory, stock exchange and other approvals in the time assumed or the need for additional time to satisfy the conditions to the completion of the transaction. As a result of the foregoing, readers should not place undue reliance on the forward-looking statements contained in this press release concerning the completion of the transaction or the timing thereof.
Forward-looking statements contained herein are made as of the date of this press release and Sprott disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances, management's estimates or opinions should change, except as required by securities legislation. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
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1 As of August 6, 2019