On September 9, 2016, Aston Hill Financial Inc. and Front Street Capital 2004 announced that they have entered into an agreement to merge their companies into a new asset management firm.
The combined firm will have approximately $3.1 billion in assets under management (“AUM”) as of August 31, 2016 and will be owned 46% by Front Street Capital 2004 (“Front Street”) and 41% by Aston Hill Financial Inc. (“Aston Hill”). Following the close of the transaction, Joe Canavan will be the new Chief Executive Officer of the combined firm with options to purchase 24 million common shares. In addition, Mr. Canavan will be appointed to the board of directors together with at least one nominee appointed by each of Aston Hill and Front Street.
As a condition to closing, holders of Aston Hill’s outstanding 6.50% extendible convertible unsecured subordinated debentures due January 31, 2019 (the “Debentures”) will be asked to approve amendments to the terms of the Debentures that will result in holders receiving the following for each $1,000 principal amount of Debentures: (i) 1,000 common shares of Aston Hill and (ii) an amended Debenture having a principal amount of $600, paying interest at 7.00% per annum, and maturing on the fifth anniversary of the closing date of the transaction (such amended Debentures will not be convertible). Following the completion of the transaction, the current holders of Debentures will own approximately 13% of the combined company (approximately 11.5% on a fully diluted basis). The transaction is expected to close by the end of 2016, and is subject to a number of conditions precedent including the approval of Aston Hill shareholders and debentureholders, securities regulatory approval and satisfaction of other customary closing conditions
Aston Hill is an asset management company which advises retail mutual funds, closed end funds, hedge funds and segregated institutional funds.
Front Street was founded in 2001 and offers a range of investments offered as mutual funds, hedge funds, and flow-through limited partnerships. Front Street has AUM of approximately $879 million as of August 31, 2016
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