Eaton Vance Acquiring Parametric

June 5, 2003 (PLANSPONSOR.com) - Eaton Vance Corp. has signed a definitive agreement to acquire 80% of the stock of Parametric Portfolio Associates.

Per the acquisition agreement, Boston-based Eaton Vance will acquire 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 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.

Eaton Vance does not expect the transaction to result in dilution of its earnings per share for its current fiscal year ending October 31, 2003. The Board of Directors of Eaton Vance Corp. and Parametric’s shareholders have approved the acquisition agreement and expect the transaction to close in August.

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