SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
March 25, 1999
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Conning Corporation
(Exact name of registrant as specified in its charter)
Missouri
(State or other jurisdiction of incorporation)
0-23183 43-1719355
(Commission File Number) (I.R.S. Employer Identification No.)
700 Market Street, St. Louis, Missouri, 63101
(Address of principal executive offices) (zip code)
(314) 444-0498
(Registrant's telephone number, including area code)
(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 25, 1999, the Registrant's wholly owned subsidiary, Conning Asset
Management Company ("CAM"), entered into an Asset Purchase Agreement (the
"Purchase Agreement") by and between CAM and TCW Advisors, Inc. ("TCW"),
pursuant to which CAM agreed to purchase TCW's insurance company high-grade
fixed income management operations and to acquire all of TCW's right, title and
interest in and to certain Investment Advisory Agreements (the "Assumed
Contracts"). The purchase price will consist of approximately $3,000,000 in cash
(excluding acquisition expenses), and may include additional contingent
consideration of up to $2,300,000 in cash payable over the two year period after
the closing, based on the meeting of certain financial targets. The consummation
of the transaction is subject to certain customary conditions set forth in the
Purchase Agreement, including the consent of certain clients under the Assumed
Contracts to the assignment of their Investment Advisory Agreements to CAM. A
copy of the press release announcing the execution of the Purchase Agreement is
attached hereto as Exhibit 99.1.
(a) Exhibits.
99.1 Press Release dated March 26, 1999, announcing the execution
of the Asset Purchase Agreement.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: April 5, 1999 CONNING CORPORATION
By: /s/ Fred M. Schpero
Name: Fred M. Schpero
Title: Senior Vice President and
Chief Financial Officer
Press Release
March 26, 1999
Investor Contact: Conning Corporation TCW
Fred M. Schpero Josh Pekarsky
or Paul Kopsky, Jr. Kekst and Company
(314) 444-0715 (212) 521-4877
Media Contact: David Garino
(314) 982-1700
Internet: http://www.conning.com and www.tcwgroup.com
For Immediate Release
CONNING AND TCW FORM GLOBAL ALLIANCE
CONNING TO ACQUIRE TCW'S INSURANCE COMPANY HIGH-GRADE FIXED
INCOME MANAGEMENT BUSINESS
ST. LOUIS, MO and LOS ANGELES, CA, March 26, 1999 -- Conning Corporation (NASDAQ
NMS:CNNG) and The TCW Group, Inc. (TCW) announced today they have entered into a
definitive agreement in which Conning will acquire TCW's insurance company
high-grade fixed income management business, which represents approximately $2.5
billion in discretionary assets under management and assets serviced. In
addition to high-grade fixed income portfolio management, this operation
provides a full range of investment management services unique to insurance
companies, including specialized accounting, regulatory compliance, and
asset/liability consulting.
Conning and TCW also announced that they have formed a global alliance in which
each party will actively refer its clients to, or obtain sub-advisory services
from, the other party for investment management products it does not currently
provide. Under this global alliance, Conning may direct its clients to TCW for
certain equity-based asset management services, including actively-managed U.S.
and international equities, as well as alternative investments and comprehensive
asset allocation products. Business referred to Conning may include insurance
company high-grade fixed income asset management and a full array of ancillary
insurance company services for TCW's insurance company clients.
Subject to certain adjustments, the purchase price for the acquired business is
expected to equal approximately 1.5 times annualized management fees relating to
this business. A portion of the consideration, up to $3.0 million, will be paid
at closing with the remainder, up to $2.3 million, over the next two years,
subject to successful retention of acquired client relationships and meeting
certain revenue targets on the acquired business. The acquisition will be
treated as an asset purchase and is expected to be accretive to Conning's
earnings during the first full year of operations.
Leonard M. Rubenstein, Conning Corporation's Chairman, President and Chief
Executive Officer, stated, "We believe this transaction and relationship are
very positive for Conning. The transaction continues our strategy of creating
scale efficiencies by increasing the amount of assets we manage, and provides
our organization with an alliance that could give our clients access to TCW's
outstanding equity investment products.
<PAGE>
Donald L. McDonald, Conning's Executive Vice President - Asset Management, said,
"We are pleased to welcome to Conning Walter Blasberg, TCW's Managing Director
of the insurance asset management business. We know he can make an important
contribution and ensure a seamless transition for TCW clients."
TCW President Marc Stern, said, "This transaction will enable TCW to concentrate
our full efforts on the continued growth of our investment management
operations, while also opening new areas of opportunity through our global
alliance with Conning. Outside of the high-grade area we remain fully committed
to serving insurance companies, which today are an important source of assets
for TCW's investment strategies."
Mr. Blasberg added, "We have great respect for Conning and believe our clients
will be well served by its expertise, commitment and focus on providing high
quality, tailored services to the insurance industry."
Conning will integrate TCW's insurance asset management operations through its
Hartford offices. Conning will be able to use its existing accounting and
administrative infrastructure to absorb a significant portion of those functions
currently being performed by TCW. The transaction is expected to close during
the second quarter of this year, subject to customary conditions.
Conning provides asset management services to insurance companies, manages
private equity funds investing in insurance and insurance-related companies, and
conducts in-depth research concerning the insurance industry.
Founded in 1971, the TCW Group of companies, including Trust Company of the
West, manages approximately $55 billion in assets for many of the United State's
largest corporate, public and union pension plans, charitable foundations,
endowments and financial institutions. Headquartered in Los Angeles, California,
TCW also maintains offices in San Francisco, Houston, New York, Hong Kong and
London.
The preceding discussion of expected results may constitute forward-looking
statements. Actual results could differ from expected results due to various
factors, including whether the revenue contribution and accretion of TCW's
high-grade fixed income insurance operations have been projected accurately, the
effect of recent volatility in securities markets, and the ability to
successfully integrate the high-grade fixed income insurance operations of TCW.
