Under terms of the purchase, Boston-based Eaton Vance acquired 80% of Parametric’s stock for $28 million in cash. Shareholders of the remaining 20% – consisting of Parametric’s current investors and key executives – will have annual rights beginning in 2006 to sell their shares to Eaton Vance, according to a news release.
Additionally, Eaton Vance will have certain rights to purchase such shares, over an eight-year period, at prices based on a multiple of Parametric’s prior year’s earnings before interest and taxes. The acquisition, which will place Parametric as a subsidiary of Eaton Vance while retaining the firm’s current management, increases Eaton Vance’s current assets under management by approximately 8% to $70 billion .
The acquisition of Seattle-based Parametric, an investment management firm with $4.7 billion in assets under management, primarily in managed separate accounts, is consistent with acquisitions Eaton Vance has made recently. Notably, in 2001, the firm acquired majority interests in Atlanta Capital Management Company, LLC and Fox Asset Management LLC, both of which have a focus on the separately managed account business. Parametric offers two principal products:
- actively-managed core investment portfolios
- overlay portfolio management for multi-manager or multi-style accounts.