The Rydex deal is done! But how has the deal developed since last fall?
Our reporters first heard from credible sources that Rydex was for sale by early October of 2006. It was not until this April that we felt sufficiently comfortable with our sourcing to publish a story with word on the sale process and the fund firms that could be interested in purchasing the Rockville, Maryland-based fund firm. That deal is now in its final stages, say sources, and word of the auction has now been picked up by a growing number of financial media outlets.
officials are declining to comment on the sales process or comment at all to MFWire. In May, a Rydex spokesperson confirmed in conversations that the mutual fund firm is indeed for sale.
Sources from inside Rydex
have told MFWire
reporters that the winning bidder has been selected by the Viragh family and their bankers at Goldman Sachs
. The most mentioned winner's name is Security Benefit Life
, which sources say has agreed to purchase a controlling stake in Rydex
for roughly $200 million. However, the MFWire
team has been unable to confirm those rumors and the deal's details. Also mentioned by sources is a Chicago-based private equity firm GTCR Golder Rauner LLC
Below are the links to the key news stories in the history of this deal. We will be updating this page regularly as the story evolves.
Rydex Sale Timeline:
: Industry insiders tell MFWire
reporters that a "pitch book" will make the rounds soon. Books typically are prepared by investment bankers overseeing a sale and are circulated to prospective buyers under a non-disclosure agreement (NDA). Sources point to Goldman Sachs as the i-bankers on the deal.
April 2, 2007
breaks the news that Rydex
is for sale after confirming the auction with multiple sources familiar with the pitch book (see "Ryding to Auction, April 2, 2007
: A follow-up story on MFWire
confirms the identity of Rydex
's bankers -- Goldman Sachs
-- after the hire was confirmed by sources inside the investment banking industry. The Goldman team is led by Chris Spofford
and Don Truesdale
. Neither banker has returned entreaties for comment. The story also identifies the Man Group
, Security Benefit and IXIS Asset Management Distributors
as the top bidders interested in Rydex
. Separately, an investment banker told MFWire
that a number of private equity firms had shown interest in Rydex
. Pricing on the deal is reported as 10 to 12 times Rydex
's $67 million of EBITDA. Sources tell MFWire
on background that the Viragh family is seeking a higher price for the property rather than accepting a lower price for a strategic buyer (see Rydex' Sale: Will the Best Man Win?, April 9, 2007
| Carl Verboncoeur |
: Employees at Rydex
tip the MFWire
that CEO Carl Verboncoeur
called an "all-employee meeting" at which top executives at the mutual fund firm confirmed the sales rumors to employees. Executive recruitors inform MFWire
reporters of a "spike" in resumes coming from Rydex
sales staff (see "Rydex Execs Hold a Pow-wow, April 17, 2007
: A spokesperson for Rydex
confirms to the MFWire
on multiple occasions that the company is for sale, though she claims other facts in the prior articles were inaccurate.
: Security Benefit Life -- one of the finalists in the Rydex
auction -- announces the purchase of Avera Global Partners
, a 10-employee asset manager based in San Francisco.
reports that AIM Distributors
CEO Gene Needles
had been reassigned and that Invesco is out of the running in the Rydex
auction. The report is based on information from multiple sources from late May to early June who claim that a bidder (Security Benefit) has already begun final due diligence -- the last part of the sale process -- and that the announcement inside Rydex
is imminent (see "Invesco Ousts AIM Distributors' Chief, June 8, 2007
). An hour later TheStreet.com's Mark DeCambre
reports "Rydex Near a Sale
." DeCambre names Invesco and E-Trade
as potential buyers of Rydex and pegs the pricing at $800 million to $1 billion. Meanwhile, an industry source tells MFWire that the pricing has slipped to $200 million for a majority stake in Rydex
and that the Viragh Trust will retain a portion of its stake. That source names Security Benefit as the buyer, though that remains unconfirmed.
: Riding the coattails of TheStreet, InvestmentNews'
reporter David Hoffman writes that about the deal in a pair of stories (See: "here
). Hoffman's stories are based on unnamed sources and "press reports." (InvestmentNews is a Crain Communications
publication unrelated to the MFWire
and MFWire's publisher InvestmentWires
: Dow Jones reports
could be sold for as much as $1 billion and that E-Trade
is a leading contender to close the deal. No source interviewed by MFWire
has mentioned E-Trade during the nine months we have tracked down the story.
examines the attractiveness of the rumored $1 billion price tag for Invesco and E*Trade (read: "Does a Billion Dollar Bet On Rydex Make Sense?
: InvestmentNews cites
two unnamed executives at firms that looked at Rydex as saying that Rydex' bankers are emphasizing the mutual fund firm's ETFs capabilities. The two executive sources both work at firms that pulled out from the bidding in recent months, says the story.
: Security Benefit does the deal! (See: "Rydex Says Yes to Security Benefit
Also on June 28
, the law firm who advised Security Benefit on the deal unveiled itself with a release. (See: "Identity of Security Benefit Lawyers Revealed
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