Impax to buy Pax World in potential $90m deal

Pax World Management, the $4.5bn US fund manager of the Pax World Funds range, and one of the oldest SRI managers in the market with more than 45 years of business, is being bought by Impax Asset Management Group, the $9.4 billion London-based sustainable investment specialist, in a deal valued at a potential US$90m via a combination of cash and shares.
Impax, whose own biggest shareholders include BNP Paribas Asset Management with a 24.9% stake, will pay an initial $52.5m, plus additional contingent payments of up to US$37.5m to 2021, subject to Pax’s performance. Exiting shareholders – principally the Shadek family – who own approximately 83.3% of Pax, will receive US$44.2m in cash and up to US$31.3m of contingent payments. Other Pax Management shareholders, representing circa 16.7% of the share register will receive Impax shares in 2021 valued at a minimum of US$8.3m plus up to US$6.3m of contingent payments.
The buy-out is subject to the approval of shareholders of Pax’s mutual funds and regulators.
Impax and Pax first formed a partnership in 2007 to design and manage the Pax Global Environmental Markets Fund, which was launched in 2008 and now runs over $500m in assets.
Under the deal, Pax will be renamed Impax Investment Management (US) LLC and continue to manage the Pax World Funds as Impax’s U.S.-based mutual fund division. Pax also runs a number of separately managed accounts.Joe Keefe, Pax’s President & Chief Executive Officer, will continue to lead the renamed US entity, reporting to Ian Simm, Impax’s Chief Executive. Keefe will also be named to Impax Asset Management’s board.
Impax said other members of Pax’s management and senior staff had agreed to enter new employment agreements to stay with the combined firm.
Keefe said: “Pax World Funds’ shareholders stand to benefit in significant ways from our increased scale, research and investment capabilities as we seek to deliver a more robust investment and distribution platform for the global market.”
Pax World was founded in 1971 by Luther Tyson and Jack Corbett, who worked on peace, housing and employment issues for the United Methodist Church and wanted to make it possible for investors to align their investments with their values. The Pax World Fund launched on August 10, 1971 with $101,000 in assets, it was the first publicly available mutual fund in America to use social as well as financial criteria in its investment decision-making process.
Impax shares are up by 20.50p (19.07%) following news of the deal.