bsig-20210330

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): March 30, 2021

BrightSphere Investment Group Inc.

(Exact name of registrant as specified in its charter)


Delaware	001-36683	47-1121020
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

200 Clarendon Street, 53rd Floor

Boston, Massachusetts 02116

(617) 369-7300

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Securities registered or to be registered pursuant to Section 12(b) of the Act.


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.001 per share	BSIG	New York Stock Exchange
4.800% Notes due 2026	BSIG 26	New York Stock Exchange
5.125% Notes due 2031	BSA	New York Stock Exchange

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2).

Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

ITEM 1.01 Entry into a Material Definitive Agreement.

On March 30, 2021, BrightSphere Investment Group Inc. (“BrightSphere”), through its subsidiary BrightSphere (Landmark) LLC, a Delaware limited liability company (the “BrightSphere Seller”), entered into an Equity Purchase Agreement (the “Landmark Purchase Agreement”) with Landmark Investment Holdings LP, a Delaware limited partnership (the “Landmark Seller”), Landmark Partners, LLC, a Delaware limited liability company (the “Company”) and subsidiary of the BrightSphere Seller and the Landmark Seller, which hold sixty percent (60%) and forty percent (40%) of the interests in the Company, respectively, and Ares Holdings L.P., a Delaware limited partnership (the “Buyer”), pursuant to which the Buyer will purchase (i) the BrightSphere Seller’s sixty percent (60%) interest in the Company in exchange for $690 million of cash consideration and (ii) the Landmark Seller’s forty percent (40%) interest in the Company in exchange for $390 million comprised of a combination of cash and equity interests of Buyer, representing a total enterprise value of $1,080,000,000. Pursuant to the Landmark Purchase Agreement, the Buyer will purchase the Company on a cash-free, debt-free basis. The transaction is subject to certain customary closing and post-closing adjustments to purchase price, including for cash, debt, working capital, transaction expenses, and changes to the revenue run-rate for clients of the Company prior to closing. The Landmark Purchase Agreement contains customary representations, warranties and covenants of the BrightSphere Seller, the Landmark Seller, and the Company, including, among others, covenants to conduct the business of the Company in the ordinary course during the period between the execution of the Landmark Purchase Agreement and the closing of the transaction. The Landmark Purchase Agreement does not contain any indemnification provisions and the Buyer has obtained, at its own expense, a representations and warranty insurance policy. The closing of the transaction is subject to various closing conditions, including, among others, (i) the receipt of approval, or the expiration or termination of the waiting period, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, (ii) clearance from the Securities and Futures Commission of Hong Kong, (iii) the absence of any preliminary or permanent injunction or other order preventing the closing of the transaction, (iv) the absence of a material adverse effect between the signing date and the closing, (v) the accuracy of the fundamental representations and warranties in all but de minimis respects and the accuracy of the general representations and warranties except as would not result in a material adverse effect, (vi) the revenue run-rate for all investment advisory clients of the Company at closing being equal to or greater than 80% of the revenue run-rate for such clients as of January 1, 2021, and (vii) no event occurring that would cause or give rise to a “key person event” or other similarly defined event under the constituent documents of a specified group of Company funds. The Landmark Purchase Agreement contains customary termination provisions, and may be terminated by the parties if the closing does not occur on or before September 30, 2021.

The Buyer has also agreed to acquire the BrightSphere Seller’s carried interest and co-investments in the Company’s funds on the date of closing of the Landmark Purchase Agreement for approximately $34 million, subject to adjustment for certain related cashflow.

ITEM 7.01 Regulation FD Disclosure

On March 31, 2021, BrightSphere issued a press release regarding the divestiture of Landmark. A copy of the press release is attached as Exhibit 99.1 hereto.

ITEM 9.01 Financial Statements and Exhibits.

(d) Exhibits.

The information in Item 7.01 to this Form 8-K and the information filed as Exhibit 99.1 to this Form 8-K is being furnished and shall not be deemed to be "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended. Such information shall not be incorporated by reference into any filing under the Securities Act of 1933, as amended, except as may be expressly set forth in a specific filing.


Exhibit No.						Description

99.1						Press Release of the Company
104						Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this form to be signed on its behalf by the undersigned, thereto duly authorized.

Date:

March 31, 2021

BRIGHTSPHERE INVESTMENT GROUP INC.

By:

/s/ Richard J. Hart

Name:

Richard J. Hart

Title:

Chief Legal Officer and Secretary

Contact:

Elie Sugarman

[email protected]

(617) 369-7300

BrightSphere Investment Group Inc. Announces Agreement to sell Affiliate, Landmark Partners LLC

–BrightSphere and the management team of Landmark Partners LLC have entered into an agreement to sell 100% of the equity interests in Landmark to Ares Management Corporation. BrightSphere to receive approximately $724 million in cash for its 60% ownership interest in Landmark and its co-investment in Landmark funds

–Total expected after-tax proceeds to BrightSphere of approximately $630 million

BOSTON, MA – BrightSphere Investment Group Inc. (NYSE: BSIG) today announced that it has entered into a definitive agreement to sell its 60% ownership interest in Landmark Partners LLC (“Landmark”) to Ares Management Corporation (NYSE: ARES) for $690 million. As part of the transaction, Ares will also acquire the 40% ownership interest in Landmark held by the Landmark management team for $390 million, for a total transaction value of approximately $1.1 billion for 100% of Landmark Partners LLC.

In addition to acquiring BrightSphere’s equity interest in Landmark, Ares has also agreed to acquire BrightSphere’s co-investments in Landmark funds, which had a book value of approximately $34 million as of December 31, 2020. BrightSphere anticipates total after-tax proceeds from the transaction of approximately $630 million, including proceeds from the sale of co-investments.

The transaction is subject to customary regulatory approvals and closing conditions and is anticipated to close in the second quarter of 2021.

Suren Rana, BrightSphere’s President and Chief Executive Officer said, “Landmark is combining with one of the top leaders in the alternatives business for whom Landmark brings highly strategic, complementary and synergistic capabilities. I would like to thank the remarkably talented team at Landmark for their important contributions to BrightSphere. We sincerely wish them the best in all their future initiatives.”

“The valuation received in this transaction unlocks significant value for BrightSphere’s shareholders and we believe again highlights the high intrinsic value embedded in our businesses relative to our stock’s current trading levels. Our remaining business continues to be strong with best-in-class quantitative strategies offered through Acadian as well as fundamental strategies through TSW and private alternatives strategies through Campbell Global,” Mr. Rana added.

Founded in 1989 and acquired by BrightSphere in August of 2016, Landmark specializes in secondary market transactions in private equity, real estate and infrastructure funds and investments. As of and for the year ended December 31, 2020, Landmark had $18.4 billion in assets under management, with GAAP management fee revenue of $146.8 million and

contributed GAAP net income attributable to controlling shareholders and Adjusted EBITDA to BrightSphere of $12.3 million and $42.2 million, respectively.1

Morgan Stanley & Co LLC acted as financial advisor to BrightSphere. Goldman Sachs & Co. LLC acted as financial advisor to Landmark. Ropes & Gray served as legal advisor to BrightSphere and Landmark. RBC Capital Markets, LLC and Credit Suisse Securities (USA) LLC acted as financial advisors to Ares and Kirkland & Elis LLP served as their legal advisor.

About BrightSphere

BrightSphere is a diversified, global asset management company with approximately $157 billion of assets under management as of December 31, 2020. Through its world-class investment management Affiliates, BrightSphere offers sophisticated investors access to a wide array of leading quantitative and solutions-based, private and public market alternative, and liquid alpha strategies designed to meet a range of risk and return objectives. For more information, please visit BrightSphere’s website at www.bsig.com. Information that may be important to investors will be routinely posted on our website.

Forward Looking Statements

This press release includes forward-looking statements, including those related to the completion of our disposition of Landmark, the expected total and after-tax proceeds from the disposition, the expected closing date of the transaction and the strength and intrinsic value of our business. The words or phrases “expect,” “anticipate,” “estimate,” and other similar expressions are intended to identify such forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Such statements are subject to various known and unknown risks and uncertainties and readers should be cautioned that any forward-looking information provided by or on behalf of the Company is not a guarantee of future performance.

Actual results may differ materially from those in forward-looking information as a result of various factors, some of which are beyond the Company’s control, including, but not limited to, those discussed in the Company’s most recent Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 1, 2021, and subsequent SEC filings, as well as those related to the expected closing of the transaction and the satisfaction of necessary closing conditions. Due to such risks and uncertainties and other factors, the Company cautions each person receiving such forward-looking information not to place undue reliance on such statements. Further, such forward-looking statements speak only as of the date of this press release and the Company undertakes no obligations to update any forward looking statement to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events.

_________________________

See “Non-GAAP Measures” and “Reconciliation of Landmark GAAP net income attributable to controlling interests to Adjusted EBITDA” at the end of this release for more information.

Non-GAAP Financial Measures

This release contains references to Adjusted EBITDA, which is a non-GAAP financial measure. A reconciliation of Adjusted EBITDA to GAAP net income attributable to controlling interests is included below. The Company notes that its calculation of Adjusted EBITDA may not be consistent with Adjusted EBITDA as calculated by other companies.

Reconciliation of Landmark GAAP net income attributable to controlling interests to Adjusted EBITDA