HFA Holdings, an Australian asset manager specialising in absolute return funds of funds, has confirmed its acquisition of Florida-based Lighthouse Partners for USD348.5m cash and 134.67 million HFA shares, in a deal first announced in the summer but delayed by the recent market turbulence.

HFA has also announced a fully underwritten equity raising, to be completed via a 15 per cent placement followed by a two-for-five renounceable rights issue to raise USD258bn toward the cash consideration for the acquisition. The balance of the cash consideration and transaction costs will be funded by a loan of up to USD130m.

Lighthouse Partners is an investment management company dedicated to managing funds of hedge funds with more than USD8bn under management for a worldwide client base including corporations, university endowments, public and private foundations, pension plans, family offices, insurance companies and individual investors. Lighthouse is based in Palm Beach Gardens, Florida, with research offices in New York, Chicago, London and Hong Kong.

Lighthouse management has committed to reinvest 50 per cent of the after-tax cash proceeds from the sale into Lighthouse products for at least two years, and it has agreed to have the new shares in HFA to be issued under the merger escrowed, with the restrictions being lifted in three equal stages at the end of June and December 2008 and at the end of June 2009.

The completion of the merger remains subject to various conditions including shareholder and regulatory approval. It is expected to be completed on or about March 31 next year.

Established in 1998, HFA is one of Australia's largest providers of absolute return funds of funds to retail, wholesale and institutional investors throughout the country, with offices in Sydney, Melbourne and Brisbane and executives based in Perth and Hobart. It has four operating divisions including research and investments, distribution, operations and special projects.


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