March 5 (Bloomberg) -- Evercore Partners Inc. agreed to buy 49 percent of money-management firm Atalanta Sosnoff Capital LLC for as much as $83.3 million as it seeks to reduce its reliance on revenue from takeover and restructuring advice.
Evercore will pay $68.6 million in cash when the deal is completed and up to $14.7 million in cash and stock if Atalanta Sosnoff meets 2010 earnings targets, the New York-based company said in a document summarizing the transaction. Evercore expects the purchase to close in the second quarter and increase earnings by 3 percent to 5 percent this year.
Chief Executive Officer Ralph Schlosstein, who helped found the money-management firm BlackRock Inc., is trying to diversify Evercore’s income sources at a company where fees from providing advice on takeovers and restructuring account for more than 90 percent of revenue. Fund management generated $20.5 million of the firm’s $313 million net revenue in 2009.
“This acquisition is consistent with our strategy of partnering with exceptional investment firms, which manage high value-added products and have significant equity ownership by management,” Schlosstein said in a statement.
Atalanta Sosnoff’s management team will continue to own 51 percent of the company, which has more than $10 billion of assets under management, and the investment processes will be unchanged. Chairman Martin Sosnoff, who founded the New York- based firm in 1981, will continue to run the company along with President Craig Steinberg and three people appointed by Evercore.
Trilantic Partners
Atalanta Sosnoff’s funds invest in the equity of large- capitalization companies as well as in fixed-income products or a combination of the two, according to its Web site.
Evercore, founded in 1996 by former U.S. Deputy Treasury Secretary Roger Altman, said last month it would issue shares worth at least $16.5 million to acquire a minority interest in Trilantic Capital Partners’ current private-equity fund and agreed to commit up to $50 million to the next fund.
Trilantic, which has $3.9 billion in capital commitments, manages two merchant-banking funds that used to be part of Lehman Brothers Holdings Inc. and is now led by five of its former managers from Lehman.
Credit Suisse Group AG’s U.S. subsidiary advised Atalanta Sosnoff on the transaction, while Evercore used its own bankers.
--Editors: Alec McCabe, Steve Dickson.
Companies: EVR US
Categories: NI FND NI SCR NI FIN NI US NI NY NI MNA
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To contact the reporter on this story: Christine Harper in New York at charper@bloomberg.net
To contact the editor responsible for this story: Alec McCabe at amccabe@bloomberg.net.
From Bloomberg businessweek published on March 05, 2010, 9:46 AM EST
