STOCK PURCHASE AGREEMENT
between
BANK OF MONTREAL HOLDING INC.
and
VIRTUS INVESTMENT PARTNERS, INC.
Dated as of October 27, 2016
STOCK PURCHASE AGREEMENT
Stock Purchase Agreement, dated as of October 27, 2016 (hereinafter the “Agreement”),
between Bank of Montreal Holding Inc., a Canadian corporation (“Seller”), and Virtus Investment Partners, Inc., a Delaware corporation (“Buyer”).
WITNESSETH:
WHEREAS,
Buyer desires to purchase from Seller and Seller desires to sell to Buyer, on the terms and subject to the conditions of this Agreement, 1,727,746 shares (the “Shares”) of the common stock of the Buyer, par value $0.01 per share (the “Common Stock”) (such purchase, the “Stock Purchase”).
NOW, THEREFORE,
in consideration of the premises and the mutual promises contained herein, the parties hereby agree as follows:
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1.
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CLOSING; SALE AND TRANSFER OF SHARES
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The closing (the “Closing”) of the Stock Purchase shall take place at 2:00 p.m., New York City time, on the date hereof, or at such other time and date as the parties may mutually agree.
(a)
The purchase price for the Shares shall be an aggregate amount computed by multiplying (i) $93.50 by (ii) the number of Shares (the “Purchase Price”).
(b)
The Purchase Price shall be payable at the Closing in cash by wire transfer of immediately available federal funds to such bank account as shall be designated by Seller.
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3.
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REPRESENTATIONS AND WARRANTIES OF SELLER
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1.
Authority; Enforceability
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Seller has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated on the part of Seller hereby. This Agreement has been duly executed and delivered by Seller and is a valid and binding agreement of Seller, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally and by general equity principles.
2.
Ownership of Shares
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Seller owns all Shares free of any “adverse claim” pursuant to section 8-102 of the New York Uniform Commercial Code.
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4.
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REPRESENTATIONS AND WARRANTIES OF BUYER
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1.
Authority; Enforceability
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Buyer has the corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated on the part of Buyer hereby. This Agreement has been duly executed and delivered by Buyer and is a valid and binding agreement of Buyer, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency or other similar laws relating to or affecting creditors’ rights generally and by general equity principles.
2.
Funds
Buyer has, and will have at the Closing, sufficient funds available to consummate the transactions contemplated hereby.
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5.
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AGREEMENTS OF BUYER AND SELLER
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1.
Mutual Cooperation
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Subject to the terms and conditions hereof, Seller and Buyer agree to use their reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement.
2.
Further Action
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Buyer and Seller (i) shall each execute and deliver, or cause to be executed and delivered, such documents and other instruments and shall take, or shall cause to be taken, such further action as may be reasonably necessary to carry out the provisions of this Agreement and give effect to the transactions contemplated by this Agreement, and (ii) shall refrain from taking any actions that could reasonably be expected to impair, delay or impede the Closing or the consummation of the transactions contemplated by this Agreement.
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6.
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MISCELLANEOUS AGREEMENTS OF THE PARTIES
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1.
Non-Assignability
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This Agreement shall inure to the benefit of and be binding on the parties hereto and their respective successors and permitted assigns. This Agreement shall not be assigned by either party hereto without the express prior written consent of the other party, and any attempted assignment, without such consents, shall be null and void. All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Closing.
2.
Amendment; Waiver
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This Agreement may be amended, supplemented or otherwise modified only by a written instrument executed by the parties hereto. No waiver by either party of any of the provisions hereof shall be effective unless explicitly set forth in writing and executed by the party so waiving.
3.
Governing Law
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(a)
This Agreement shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts to be performed within such state.
(b)
Each party agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court sitting in the Borough of Manhattan in the State of New York (the “Chosen Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (i) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (ii) waives any
objection to laying venue in any such action or proceeding in the Chosen Courts, (iii) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (iv) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in writing to such party at such party’s headquarters.
4.
Waiver of Jury Trial
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EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (III) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.4.
5.
Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
6.
Entire Agreement
.
This Agreement and the side letter of even date herewith between Buyer and Seller shall constitute the entire agreement between the parties and prior agreements and understandings, both written and oral, between the parties with respect to the subject matter herewith.
[Next page is a signature page.]
IN WITNESS WHEREOF
, the parties have caused this Stock Purchase Agreement to be duly executed as of the date first above written.
BANK OF MONTREAL HOLDING INC.
By: /s/ Bernadette Murphy
Name: Bernadette Murphy
Title: Vice President
VIRTUS INVESTMENT PARTNERS, INC.
By: /s/ George R. Aylward
Name: George R. Aylward
Title: Chief Executive Officer
N E W S R E L E A SE
Virtus Investment Partners Enters Into Stock Purchase Agreement
For 1.7 Million Shares
HARTFORD, CT, October 27, 2016 - Virtus Investment Partners, Inc. (NASDAQ: VRTS), which operates a multi-manager asset management business, today announced it has agreed to repurchase 1,727,746 shares of its common stock, or approximately 22.7 percent of shares outstanding at September 30, 2016, from its largest shareholder, Bank of Montreal Holding Inc. (BMO), representing BMO’s entire interest in Virtus.
The purchase price of $93.50 per share, or approximately $161.5 million, represents discounts of 4.0 percent and 4.6 percent, respectively, to the volume-weighted average prices for the 5 and 20
trading days ending October 26. The repurchase will be funded from cash on hand and $30 million of proceeds from the company’s credit facility.
The repurchase was made under the company’s existing share repurchase program, which was increased to accommodate this transaction. Following this repurchase, 200,000 shares are available under the repurchase program. Immediately following the close of this transaction, the company’s effective pro forma common shares outstanding will be 5.9 million shares.
“Our decision to repurchase these shares reflects our confidence in the company and our ongoing commitment to enhancing shareholder value,” said George R. Aylward, president and chief executive officer of Virtus. “We are pleased to complete this transaction, which will provide meaningful and immediate accretion to earnings per share.”
BMO acquired its interest in Virtus prior to the December 2008 spin-off that established Virtus as an independent publicly traded company. Bank of Montreal Holding Inc. is a wholly owned subsidiary of Bank of Montreal.
About Virtus Investment Partners, Inc.
Virtus Investment Partners (NASDAQ: VRTS) is a distinctive partnership of boutique investment managers singularly committed to the long-term success of individual and institutional investors. The company provides investment management products and services through its affiliated managers and select subadvisers, each with a distinct investment style, autonomous investment process, and individual brand. Virtus Investment Partners offers access to a variety of investment styles across multiple disciplines to meet a wide array of investor needs. Its affiliated managers include Duff & Phelps Investment Management, Euclid Advisors, Kayne Anderson Rudnick Investment Management, Newfleet Asset Management, Rampart Investment Management, and Virtus ETF Solutions. Additional information can be found at virtus.com.
Forward-Looking Information
This press release contains statements that are, or may be considered to be, forward-looking statements. All statements that are not historical facts, including statements about our beliefs or expectations, are “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements may be identified by such forward-looking terminology as “expect,” “estimate,” “plan,” “intend,” “believe,” “anticipate,” “may,” “will,” “should,” “could,” “continue,” “project,” or similar statements or variations of such terms.
Our forward-looking statements are based on a series of expectations, assumptions and projections about our company, are not guarantees of future results or performance, and involve substantial risks and uncertainty, including assumptions and projections concerning our assets under management, cash inflows and outflows, operating cash flows, our ability to expand distribution and product offerings, and future credit facilities, for all forward periods. All of our forward-looking statements are as of the date of this release only. The company can give no assurance that such expectations or forward-looking statements will prove to be correct. Actual results may differ materially.
Our business and our forward-looking statements involve substantial known and unknown risks and uncertainties, including those discussed under “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2015 Annual Report on Form 10-K, as well as the following risks and uncertainties: (a) any reduction in our assets under management; (b) the withdrawal, renegotiation or termination of investment advisory agreements; (c) damage to our reputation; (d) failure to comply with investment guidelines or other contractual requirements; (e) the inability to attract and retain key personnel; (f) the competition we face in our business; (g) adverse regulatory and legal developments; (h) unfavorable changes in tax laws or limitations; (i) adverse developments, or
changes in our relationships with, unaffiliated subadvisers; (j) changes in key distribution relationships; (k) interruptions in service or failure to provide service by third-party service providers; (l) volatility associated with our common stock; (m) civil litigation and government investigations or proceedings; (n) the risk of capital loss associated with our investments; (o) the inability to make quarterly distributions; (p) the lack of availability of required and necessary capital on satisfactory terms; (q) liabilities and losses not covered by insurance; (r) the inability to satisfy financial covenants under existing debt agreement; (s) strategic transactions and other risks and uncertainties described in our 2015 Annual Report on Form 10-K or in any of our filings with the Securities and Exchange Commission (“SEC”).
Certain other factors which may impact our continuing operations, prospects, financial results and liquidity or which may cause actual results to differ from such forward-looking statements are discussed or included in the company’s periodic reports filed with the SEC and are available on our website at www.virtus.com under “Investor Relations.” You are urged to carefully consider all such factors.
The company does not undertake or plan to update or revise any such forward-looking statements to reflect actual results, changes in plans, assumptions, estimates or projections, or other circumstances occurring after the date of this release, even if such results, changes or circumstances make it clear that any forward-looking information will not be realized. If there are any future public statements or disclosures by us which modify or impact any of the forward-looking statements contained in or accompanying this release, such statements or disclosures will be deemed to modify or supersede such statements in this release.
Contacts
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Jeanne Hess, Investor Relations
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Joe Fazzino, Media Relations
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(860) 263-4730
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(860) 263-4725
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jeanne.hess@virtus.com
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joe.fazzino@virtus.com
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