New Delhi: Religare Enterprises on Tuesday said that it will acquire US-based investment company Northgate Capital, in a deal estimated at $200 million (about Rs900 crore), and has decided to invest up to $1 billion for buying asset management businesses globally.
Sources said that the deal to acquire over 65% stake in Northgate Capital could be valued at $200 million and would be funded out of the $1 billion warchest prepared for purchasing asset management firms.
The financial services provider has entered into a definitive agreement to acquire a majority equity interest in Northgate’s management company, Religare said in a statement. The transaction is expected to close by June.
“The partnership will accelerate our process of seeking similar partnerships in other asset classes, including both alternatives and traditional in developed and emerging markets,” Religare Enterprises chief executive officer and managing director Sunil Godhwani said.
Sources said that the firm is also looking at funding more such buyouts in the US and Europe and would utilise the $1 billion within the next 12 months.
“Religare would be looking at acquiring majority stake in two more asset management companies globally in the next six months,” a source said.
Post acquisition, the five partners of Northgate would continue to retain stake in the management company and run its daily operations.
Northgate currently manages about $3 billion for over 400 institutional and high net worth individuals. The asset management company focuses on investing in private equity and venture capital funds.
“Religare will uniquely strengthen our industrial and capital markets insights and solidify our presence, access, and investment due diligence in the emerging markets, especially Asia,” Hosein Khajeh-Hosseiny, partner and head of Global Private Equity at Northgate said.
Religare has been on an expansion drive of its financial services business for the past two years through a string of acquisitions and joint ventures (JV).
Earlier in 2008, Religare bought London’s oldest brokerage firm Hichens Harrison for $110 million followed by the acquisition of Lotus Asset Management Company later that year. Last year Religare also bought 87.5% in Maharishi Housing Development Finance Corp, a small Delhi-based firm by infusing Rs93 crore and entering the housing finance business.