HF2 Financial Management in Denver is acquiring a majority equity interest in ZAIS Group, a specialty investment management firm.
The acquisition deal is expected to facilitate “the public flotation of ZAIS and provide the company with significant equity capital to accelerate its strategic growth initiatives,” HF2 said in a press release Wednesday. The transaction is expected to be completed in January 2015.
At closing HF2 will invest roughly $175 million in the company in exchange for newly issued equity interests in ZGP equal to the number of shares of HF2’s Class A common stock outstanding. HF2 will own approximately 73% of ZAIS, the current owners will retain approximately 22% of ZAIS and key employees will own the remaining 5%.
ZAIS Group of Red Bank, N.J., had approximately $5 billion of assets under management as of June 30. Under the terms of the agreement the current owners of ZAIS “will retain a significant equity stake in the company,” but will not receive any sales proceeds, while ZAIS employees who are directly involved in the company growth also will receive “meaningful, long-term equity incentives,” according to the release.
After the acquisition is completed the owners of the company will have the right to convert their ZGP ownership interests into a total of 7 million Class A Shares. In addition, ZGP will issue up to 1.6 million equity interests to key employees, who can make a one-to-one exchange with Class A shares.
In connection with the transaction, HF2 will be renamed ZAIS Group Holdings Inc. and will apply to continue its public listing on the Nasdaq Capital Market under the new ticker symbol “ZAIS.” Following the transaction, ZAIS’s management team, led by Christian Zugel, founder and chief investment officer, and Mike Szymanski, president, will lead the combined organization.