Company expands in Brazil with mutual fund and asset management
acquisition
DES MOINES, Iowa--(BUSINESS WIRE)--Mar. 1, 2012--
The Principal Financial Group, Inc. (NYSE: PFG), a global retirement
and investment management leader, today announced a definitive
agreement to purchase a 60 percent indirect ownership of Claritas
Administração de Recursos Ltda. / Claritas Investments, Ltd. (Claritas).
Price is not being disclosed.
Claritas is a leading Brazilian mutual fund and asset management company
with more than R$3.1 billion in assets under management1
(US$1.8B). The Sao Paulo-based company manages equity funds, balanced
funds, managed accounts and other strategies for affluent clients and
institutions through its multi-channel distribution network.
“Entering the Brazilian mutual fund and asset management market has long
been a strategic priority for The Principal® and we are
pleased to partner with the talented team at Claritas,” said Luis
Valdes, president and CEO of Principal International. “The company’s
strong management team, solid investment track record, value added
products for Brazilians and potentially international customers, and
diversified distribution through financial advisors are all important
competencies as we continue to grow our mutual fund and asset management
business in Latin America.”
“The strategic partnership with The Principal provides additional
resources to the company while preserving our management philosophy and
investment culture,” said Carlos Ambrósio, managing partner and head of
structured products at Claritas. “With The Principal’s global investment
expertise, we can expand our capabilities and provide greater
opportunities to clients.”
This is the second business partnership for The Principal in Brazil.
Since 1999, The Principal has offered pension and annuity products
through Brasilprev, its joint-venture operation with Banco do Brasil.
With assets under management of US$27.4 billion2, Brasilprev
is currently the fastest-growing and third largest retirement player in
Brazil3.
According to Larry D. Zimpleman, chairman, president and CEO of The
Principal, “We will continue to deploy capital for acquisitions that are
aligned with our focused strategies and complementary to our existing
businesses. While Brasilprev and Claritas target different markets, both
support our goal to be a pension and long-term investment leader in
Brazil.”
This announcement is part of The Principal’s overall plan to deploy $800
to $900 million of capital in 2012 and is in addition to the $154
million planned for the share repurchase and quarterly common stock
dividend previously announced.
The Claritas transaction is expected to be earnings per share (EPS)
neutral in 2012 and accretive to EPS and return on equity thereafter.
The deal is expected to close in April.
Lazard Frères & Co., LLC, advised The Principal on the transaction.
For more news and insights from The Principal, connect with us on
Twitter at: http://twitter.com/ThePrincipal.
Forward looking and cautionary statements
This press release
contains forward-looking statements, including, without limitation,
statements as to operating earnings, net income available to common
stockholders, net cash flows, realized and unrealized losses, capital
and liquidity positions, sales and earnings trends, and management's
beliefs, expectations, goals and opinions. The company does not
undertake to update or revise these statements, which are based on a
number of assumptions concerning future conditions that may ultimately
prove to be inaccurate. Future events and their effects on the company
may not be those anticipated, and actual results may differ materially
from the results anticipated in these forward-looking statements. The
risks, uncertainties and factors that could cause or contribute to such
material differences are discussed in the company's annual report on
Form 10-K for the year ended Dec. 31, 2011, filed by the company with
the Securities and Exchange Commission, as updated or supplemented from
time to time in subsequent filings. These risks and uncertainties
include, without limitation: adverse capital and credit market
conditions that may significantly affect the company’s ability to meet
liquidity needs, access to capital and cost of capital; continued
difficult conditions in the global capital markets and the economy
generally, that may materially adversely affect the company’s business
and results of operations; the risk from acquiring new businesses, which
could result in the impairment of goodwill and/or intangible assets
recognized at the time of acquisition; impairment of other financial
institutions that could adversely affect the company; investment risks
which may diminish the value of the company’s invested assets and the
investment returns credited to customers, which could reduce sales,
revenues, assets under management and net income; requirements to post
collateral or make payments related to declines in market value of
specified assets may adversely affect company liquidity and expose the
company to counterparty credit risk; changes in laws, regulations or
accounting standards that may reduce company profitability; fluctuations
in foreign currency exchange rates that could reduce company
profitability; Principal Financial Group, Inc.’s primary reliance, as a
holding company, on dividends from its subsidiaries to meet debt payment
obligations and regulatory restrictions on the ability of subsidiaries
to pay such dividends; competitive factors; volatility of financial
markets; decrease in ratings; interest rate changes; inability to
attract and retain sales representatives; international business risks;
a pandemic, terrorist attack or other catastrophic event; and default of
the company’s re-insurers.
About the Principal Financial Group
The Principal Financial
Group® (The Principal ®)4 is a global
investment management leader including retirement services, insurance
solutions and asset management. The Principal offers businesses,
individuals and institutional clients a wide range of financial products
and services, including retirement, asset management and insurance
through its diverse family of financial services companies. Founded in
1879 and a member of the FORTUNE 500®, the Principal
Financial Group has $335 billion in assets under management5 and
serves some 18 million customers worldwide from offices in Asia,
Australia, Europe, Latin America and the United States. Principal
Financial Group, Inc. is traded on the New York Stock Exchange under the
ticker symbol PFG. For more information, visit www.principal.com.
1 As of 12/31/2011
2 As of 12/31/2011
3
Based on assets under management, Fenaprevi (May 2011)
4
“The Principal Financial Group” and “The Principal” are registered
service marks of Principal Financial Services, Inc., a member of the
Principal Financial Group.
5 As of Dec. 31, 2011.
Source: Principal Financial Group, Inc.
Principal Financial Group, Inc.
Media Contact:
Susan
Houser, 515-248-2268
houser.susan@principal.com
or
Investor
Relations Contact:
John Egan, 515-235-9500
egan.john@principal.com
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