Werba Reinhard Holding Ltd.’s two-year quest to acquire Loring Ward International Ltd. is almost at an end.
The offer by San Jose, Calif.-based WRH to buy Loring Ward, a New York-based asset manager and provider of advisor services, was overwhelmingly approved by shareholders at a special meeting in Toronto earlier this month.
More than 90% of shareholders voted in favour of the deal, which will pay them US$11.25 a share, for a total of US$87 million, after the scheduled closing date on or about Jan. 30. Approval from the Ontario Superior Court of Justice followed two days later.
Alan Werba, CEO of WRH, says he’s relieved the process is almost over. Initial attempts to buy Loring Ward began in January 2007, but were repeatedly rebuffed by the company’s board. This past fall, a deal had been agreed upon for US$18 a share, but it fell apart after Loring Ward’s assets fell by more than 20%. Along the way, Werba and his business partner, Eli Reinhard, became Loring Ward’s biggest shareholders.
The soap opera included Loring Ward signing an agreement to sell the firm to Friedman Fleischer & Lowe, a U.S.-based private-equity firm, for US$16.50 a share in the summer of 2008. WRH subsequently made a higher offer, triggering a US$3.25-million breakup fee for FFL.
“We’re relieved,” Werba says. “We’re glad to be getting it done. Since the [previous] deal cratered because of the stock market, advisors, staff and shareholders have been anxious about it.”
Assuming the deal closes, Werba says, Job 1 will be to delist Loring Ward, formerly known as Assante USA, from the Toronto Stock Exchange and take it private. “Our position is the company is too small to be public,” Werba says. “The real battle was who was going to be running the company. The current CEO [Bob Herrmann] wanted to be in that position. We felt we would be a better alternative because we feel we have a better rapport with advisors.”
Herrmann could not be reached for comment.
Werba also plans to bring back several former members of Loring Ward’s executive team, including Alex Potts, who will take over as CEO. Werba will be chairman of the board while continuing to run his own book.
It is Werba’s long history with early incarnations of Loring Ward — he co-founded Reinhardt Werba Bowen Inc., an asset-management company based in San Jose that Assante purchased in 1998 — that accounts for his continued interest in the chase.
There were many times when Werba thought owning Loring Ward simply wasn’t meant to be, he says. But he notes that Reinhard was “very determined” that buying the company was the right thing to do.
“Several times, we were very surprised Reinhard continued to push forward. Many people would have bailed,” Werba says. “He thought it was a good company, but it needed to be under a different format. In order to keep my business there, we needed to get control of senior management and have it run the way I’d like it to be run.”
Loring Ward was known as Assan-te USA after Assante’s Canadian operations were sold to CI Fund Management Inc. in 2003 for $846 million. It was subsequently rebranded Loring Ward in honour of Loring Ward Investment Counsel, a high-end boutique founded by Marty Weinberg in Winnipeg in the mid-1980s. LWIC subsequently became one of the founding companies of Assante Corp. , which was headed by Weinberg. The Americanization of Loring Ward, including the hiring of a CEO in the U.S., began shortly after the CI deal.
Although Loring Ward has no formal relationship with former executives of Assante Corp., Werba stays in touch with both Weinberg and Kish Kapoor. “Marty is a friend from the past,” Werba says. “We’ll probably be reconnecting and doing some things. Same with Kish.”
As of Dec. 31, 2008, Loring Ward had US$4.1 billion in assets under administration and management, down from US$6 billion a year earlier. It has relationships with more than 750 advisors. IE
Acquisition of Loring Ward approaching its end
Shareholders overwhelmingly approve sale of firm to Werba Reinhard
- By: Geoff Kirbyson
- January 23, 2009 January 23, 2009
- 15:44