- Computershare (CPU) has entered a trading halt to begin a $835 million placement to purchase Wells Fargo Corporate Trust Services (CTS)
- CTS is a leading U.S.-based provider of trust and agency services to government and corporate clients
- Computershare will purchase CTS for US$750 million (A$986 million) and expects to receive the approvals for the acquisition during the second quarter of FY22
- Under the entitlement offer, the company will offer eligible shareholders one new share for every 8.8 shares held at a price of $13.55 per new share
- Computershare last traded for $14.99 on March 23
Computershare (CPU) is looking to raise $835 million to purchase the assets of Wells Fargo Corporate Trust Services (CTS).
CTS is a leading U.S.-based provider of trust and agency services to government and corporate clients.
The purchase price is US$750 million (A$986 million), and the company expects to gain the needed approvals during the second quarter of FY22.
To pay for the purchase, Computershare is undertaking an entitlement offer to raise $835 million.
Under the entitlement offer, the company will offer eligible shareholders one new share for every 8.8 shares held at a price of $13.55 per new share. The purchase price is a 9.6 per cent discount to the last close price of $14.99, on March 23.
With over 80 years of experience, CTS is currently appointed to administer corporate trust services to around 26,000 mandates across a range of securities.
Computershare says CTS is a highly strategic fit in its existing Canadian and U.S. corporate trust operations.
Computershare CEO Stuart Irving is pleased with the CTS purchase.
“It is a clear fit with our successful Canadian corporate trust operations and existing U.S. operations. CTS provides scale with a top-four market position, a platform for ongoing growth and increased leverage to long term growth trends and interest rates,” he said.
“The acquisition allows us to integrate CTS’ deep client relationships and market expertise to deliver additional recurring fee revenue,” he added.
On this news, Computershare has been placed in a trading halt. Company shares will be paused until Monday, March 29 or the entitlement offer is completed — whichever one comes first.
On the market, Computershare last traded for $14.99 on March 23.