8-K: Janus Henderson to Acquire Majority Stake in Private Credit Manager Victory Park Capital

Janus Henderson Group has announced a definitive agreement to acquire a majority stake in Victory Park Capital, a global private credit manager, expanding its private credit and institutional capabilities.

Summary

• Janus Henderson Group (JHG) has agreed to acquire a majority stake in Victory Park Capital Advisors, LLC (VPC), a private credit manager.
• The acquisition will be funded with a mix of cash and approximately 964,058 shares of JHG common stock, valued at about $34,031,250 based on a price of $35.30 per share.
• An additional earnout consideration of up to $27,843,750 in JHG common stock may be paid in 2027, contingent on achieving certain revenue targets.
• The deal is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
• VPC has invested approximately $10.3 billion across over 220 investments since inception and has approximately $6.0 billion in assets under management.
• Janus Henderson manages $36.3 billion in securitized assets and this acquisition will complement and build upon that.
• The acquisition is expected to be neutral-to-accretive to earnings per share in 2025.

Sentiment

Score: 8

Explanation: The document conveys a positive outlook on the acquisition, highlighting strategic benefits and growth opportunities. The deal is expected to be accretive, and management commentary is optimistic.

Positives

• The acquisition expands Janus Henderson's private credit capabilities and diversifies its offerings.
• VPC's expertise in asset-backed lending complements Janus Henderson's existing securitized credit franchise.
• VPC's long-standing relationships with institutional clients will enhance Janus Henderson's position in the global institutional market.
• The acquisition is expected to be neutral-to-accretive to earnings per share in 2025.
• The partnership is expected to create mutually beneficial growth opportunities.
• VPC's investment capabilities tailored to insurance companies will expand Janus Henderson's product offering for its growing insurance clientele.

Risks

• The acquisition is subject to customary closing conditions, including regulatory approvals, which may not be met.
• The anticipated benefits of the acquisition may not be fully realized.
• There is a risk that the earnout consideration may not be paid if revenue targets are not met.
• The integration of VPC into Janus Henderson may present challenges.

Future Outlook

The acquisition is expected to be neutral-to-accretive to earnings per share in 2025 and will expand Janus Henderson's private credit capabilities. The company expects to leverage VPC's expertise and client relationships to drive growth.

Management Comments

• Ali Dibadj, Chief Executive Officer of Janus Henderson, stated that the acquisition aligns with their client-led strategic vision and will enable them to deliver for clients, employees, and shareholders.
• Richard Levy, Chief Executive Officer, Chief Investment Officer, and Founder of VPC, believes the partnership will enable VPC to scale faster, diversify its product offering, and expand its distribution.
• Brendan Carroll, Senior Partner and Co-Founder of VPC, stated that the partnership creates tremendous value for clients through accelerated product development and cross-selling opportunities.

Industry Context

This acquisition reflects a broader trend of asset managers expanding into private credit markets, as clients seek diversification beyond traditional asset classes. The move also highlights the growing importance of asset-backed lending within private credit.

Comparison to Industry Standards

• Janus Henderson's acquisition of VPC is similar to other asset managers seeking to expand their private credit offerings, such as Blackstone's growth in private credit and Apollo's expansion in alternative investments.
• VPC's $6 billion in AUM is a significant but not dominant player in the private credit space, with larger firms like Ares Management and Oaktree Capital having significantly larger AUM.
• The focus on asset-backed lending is a growing trend, with firms like Golub Capital and HPS Investment Partners also active in this area.
• Janus Henderson's existing securitized credit franchise, with $36.3 billion in AUM, positions them well to integrate VPC's capabilities.

Stakeholder Impact

• Shareholders are expected to benefit from the accretive nature of the acquisition and the expansion of Janus Henderson's capabilities.
• Employees of both Janus Henderson and VPC may see new opportunities for growth and development.
• Clients will have access to a broader range of private credit solutions.
• The acquisition may impact suppliers and other business partners of both companies.

Next Steps

• The acquisition is expected to close in the fourth quarter of 2024, subject to customary closing conditions.
• Janus Henderson will integrate VPC into its operations.
• The companies will work to leverage their combined capabilities to expand product offerings and distribution.

Key Dates

Keywords

private credit, acquisition, asset management, Victory Park Capital, Janus Henderson, securitized credit, institutional investors, asset-backed lending