Sprott announces letter of intent for the acquisition of Flatiron Capital Management Partners
June 06 2012 - 6:00AM
PR Newswire (Canada)
TORONTO, June 6, 2012 /CNW/ - Sprott Inc. ("Sprott") today
announced the signing of a letter of intent (the "LOI") reflecting
an agreement in principle to acquire Flatiron Capital Management
Partners ("Flatiron"), an alternative investment manager
specializing in market-neutral strategies. As at the date hereof,
Flatiron has approximately $275 million in assets under management
("AUM"). The transaction is subject to, among other things,
satisfactory results of due diligence investigations of Flatiron
and the negotiation of definitive agreements. The transaction is an
arm's length transaction and is subject to the approval of all
applicable regulatory authorities, including the Toronto Stock
Exchange, as well as other third parties, as necessary. In
addition, the transaction remains subject to approval by Sprott's
board of directors. The parties will seek to close the transaction
by the middle of the third quarter of 2012. "We are committed to
broadening our investment capabilities by hiring best-in-class
investment managers and this transaction brings us one of Canada's
leading convertible bond arbitrage teams," said Peter Grosskopf,
Chief Executive Officer of Sprott. "We believe the Flatiron team
and strategies are uniquely qualified to perform well during the
volatile markets which we expect will persist for some time.
Flatiron will provide an ideal complement to our growing suite of
specialty fixed-income funds, which upon completion of this
transaction, will represent more than $800 million in AUM." "We are
excited to become part of the Sprott organization. Sprott is an
industry leader with an investment philosophy and outlook that
aligns closely with ours," said Steve Duenkler, Co-Founder of
Flatiron. "We look forward to working with the team at Sprott to
develop new products and introduce our approach to new investors,"
added Parm Kalirai, Co-Founder of Flatiron. Since inception in
January 2000, the Flatiron Market Neutral LP and its predecessor
managed account, the "Flatiron Fund", managed by Mr. Duenkler and
Mr. Kalirai, have generated average annual returns of 9.54%* net of
fees and expenses, compared to 5.4%* for the S&P/TSX Composite
Index over the same period. The investment strategy of the Flatiron
team is designed to provide stable and absolute returns, as well as
low volatility through all phases of the economic cycle. *as of
April 30, 2012 About Flatiron Capital Management Partners Flatiron
is an Exempt Market Dealer, Portfolio Manager and Investment Fund
Manager registered with the Ontario Securities Commission. Flatiron
manages funds for individuals and institutions. About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to
achieving superior returns for its clients over the long term. The
Company currently operates through four business units: Sprott
Asset Management LP, Sprott Private Wealth LP, Sprott Consulting
LP, and Sprott U.S. Holdings Inc. Sprott Asset Management is
the investment manager of the Sprott family of mutual funds and
hedge funds and discretionary managed accounts; Sprott Private
Wealth provides wealth management services to high net worth
individuals; and Sprott Consulting provides management,
administrative and consulting services to other companies,
including Sprott Resource Corp. , Sprott Resource Lending Corp. and
Sprott Power Corp. . Sprott U.S. Holdings Inc. includes Sprott
Asset Management USA Inc., Resource Capital Investments Inc. and
Global Resource Investments Ltd. Sprott Inc. is headquartered in
Toronto, Canada, and its common shares are listed on the Toronto
Stock Exchange under the symbol "SII". For more information on
Sprott Inc., please visit www.sprottinc.com. Forward-Looking
Statements and Past Performance Information This release contains
"forward-looking statements" which reflect the current expectations
of Sprott Inc. These statements reflect management's current
beliefs with respect to future events and are based on information
currently available to management. Forward-looking statements in
this press release include, but are not limited to, statements with
respect to the negotiation of the definitive agreements for the
transaction, the terms of such definitive agreements, the closing
of the transaction and the anticipated benefits from the
transaction. Forward-looking statements involve significant
known and unknown risks, uncertainties and assumptions, including
with respect to the anticipated completion of the negotiation of
the definitive agreements, the closing of the transaction, the
timing and receipt of all applicable regulatory approvals and third
party consents, the anticipated benefits from the transaction and
the satisfaction of other conditions to the completion of the
transaction. Many factors could cause actual results,
performance or achievements to be materially different from any
future results, performance or achievements that may be expressed
or implied by such forward-looking statements including, without
limitation, those listed under the heading "Risk Factors" in
Sprott's annual information form dated March 27, 2012 as well as
that the closing of the transaction could be delayed if the
necessary regulatory approvals and third party consents are not
obtained on the timelines planned or the transaction may not be
completed at all if these approvals are not obtained or any other
conditions to closing are not satisfied. Should one or more of
these risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance or achievements could vary materially from
those expressed or implied by the forward-looking statements
contained in this release. Although the forward-looking statements
contained in this release are based upon what Sprott believes to be
reasonable assumptions, management cannot assure investors that
actual results, performance or achievements will be consistent with
these forward-looking statements. These forward-looking statements
are made as of the date of this release and Sprott does not assume
any obligation to update or revise them to reflect new events or
circumstances, except as required by law. This release contains
past performance information relating to investment accounts that
have used Flatiron's market neutral strategy. Past performance is
not indicative of future results and there can be no assurance that
the results achieved for past investments will be achieved in the
future. Sprott Inc. CONTACT: Glen WilliamsDirector of
CommunicationsSprott Inc.(416) 943-4394gwilliams@sprott.com
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