TORONTO, June 6, 2012 /CNW/ - Sprott Inc. (TSX: SII) ("Sprott") today announced the signing of a letter of intent (the "LOI") reflecting an agreement in principle to acquire Flatiron Capital Management Partners ("Flatiron"), an alternative investment manager specializing in market-neutral strategies. As at the date hereof, Flatiron has approximately $275 million in assets under management ("AUM").
The transaction is subject to, among other things, satisfactory results of due diligence investigations of Flatiron and the negotiation of definitive agreements. The transaction is an arm's length transaction and is subject to the approval of all applicable regulatory authorities, including the Toronto Stock Exchange, as well as other third parties, as necessary. In addition, the transaction remains subject to approval by Sprott's board of directors. The parties will seek to close the transaction by the middle of the third quarter of 2012.
"We are committed to broadening our investment capabilities by hiring best-in-class investment managers and this transaction brings us one of Canada's leading convertible bond arbitrage teams," said Peter Grosskopf, Chief Executive Officer of Sprott. "We believe the Flatiron team and strategies are uniquely qualified to perform well during the volatile markets which we expect will persist for some time. Flatiron will provide an ideal complement to our growing suite of specialty fixed-income funds, which upon completion of this transaction, will represent more than $800 million in AUM."
"We are excited to become part of the Sprott organization. Sprott is an industry leader with an investment philosophy and outlook that aligns closely with ours," said Steve Duenkler, Co-Founder of Flatiron.
"We look forward to working with the team at Sprott to develop new products and introduce our approach to new investors," added Parm Kalirai, Co-Founder of Flatiron.
Since inception in January 2000, the Flatiron Market Neutral LP and its predecessor managed account, the "Flatiron Fund", managed by Mr. Duenkler and Mr. Kalirai, have generated average annual returns of 9.54%* net of fees and expenses, compared to 5.4%* for the S&P/TSX Composite Index over the same period. The investment strategy of the Flatiron team is designed to provide stable and absolute returns, as well as low volatility through all phases of the economic cycle.
*as of April 30, 2012
About Flatiron Capital Management Partners
Flatiron is an Exempt Market Dealer, Portfolio Manager and Investment Fund Manager registered with the Ontario Securities Commission. Flatiron manages funds for individuals and institutions.
About Sprott Inc.
Sprott Inc. is a leading independent asset manager dedicated to achieving superior returns for its clients over the long term. The Company currently operates through four business units: Sprott Asset Management LP, Sprott Private Wealth LP, Sprott Consulting LP, and Sprott U.S. Holdings Inc. Sprott Asset Management is the investment manager of the Sprott family of mutual funds and hedge funds and discretionary managed accounts; Sprott Private Wealth provides wealth management services to high net worth individuals; and Sprott Consulting provides management, administrative and consulting services to other companies, including Sprott Resource Corp. (TSX: SCP), Sprott Resource Lending Corp. (TSX: SIL) (NYSE AMEX: SILU) and Sprott Power Corp. (TSX: SPZ). Sprott U.S. Holdings Inc. includes Sprott Asset Management USA Inc., Resource Capital Investments Inc. and Global Resource Investments Ltd. Sprott Inc. is headquartered in Toronto, Canada, and its common shares are listed on the Toronto Stock Exchange under the symbol "SII". For more information on Sprott Inc., please visit www.sprottinc.com.
Forward-Looking Statements and Past Performance Information
This release contains "forward-looking statements" which reflect the current expectations of Sprott Inc. These statements reflect management's current beliefs with respect to future events and are based on information currently available to management. Forward-looking statements in this press release include, but are not limited to, statements with respect to the negotiation of the definitive agreements for the transaction, the terms of such definitive agreements, the closing of the transaction and the anticipated benefits from the transaction. Forward-looking statements involve significant known and unknown risks, uncertainties and assumptions, including with respect to the anticipated completion of the negotiation of the definitive agreements, the closing of the transaction, the timing and receipt of all applicable regulatory approvals and third party consents, the anticipated benefits from the transaction and the satisfaction of other conditions to the completion of the transaction. Many factors could cause actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements including, without limitation, those listed under the heading "Risk Factors" in Sprott's annual information form dated March 27, 2012 as well as that the closing of the transaction could be delayed if the necessary regulatory approvals and third party consents are not obtained on the timelines planned or the transaction may not be completed at all if these approvals are not obtained or any other conditions to closing are not satisfied. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results, performance or achievements could vary materially from those expressed or implied by the forward-looking statements contained in this release. Although the forward-looking statements contained in this release are based upon what Sprott believes to be reasonable assumptions, management cannot assure investors that actual results, performance or achievements will be consistent with these forward-looking statements. These forward-looking statements are made as of the date of this release and Sprott does not assume any obligation to update or revise them to reflect new events or circumstances, except as required by law.
This release contains past performance information relating to investment accounts that have used Flatiron's market neutral strategy. Past performance is not indicative of future results and there can be no assurance that the results achieved for past investments will be achieved in the future.
Director of Communications