The deal is worth US$160 million (about $214.22 million) in a mix of cash, shares and loan notes creates what Burford claims is the largest legal financier in the world. There is also a US$15 million (about $20 million) performance-based bonus contingent on GKC contributing US$100 million (about $133.89 million) in income.
“We know each other well and we approach the legal market in similar ways,” said Burford CEO Christopher Bogart.
“The opportunity to combine the largest public player and the largest private capital manager is unique and will create the clear leader in this rapidly growing and evolving industry,” added the former Time Warner VP and general counsel.
The combined firm, which will use the Burford name, will have US$1.2 billion (about $1.61 billion) in investments under management and 80 staff including 40 lawyers. Since their inceptions, the firms have committed more than US$2 billion (about $2.68 billion) to investments.
Registered investment adviser Gerchen Keller has US$1.3 billion (about $1.74 billion) in assets raised from public pensions, financial institutions, university endowments, foundations and family wealth offices.
“Our firms share similar cultures and ambitions, and we are looking forward to all of the exciting things we can do together for the benefit of all of our investors and clients,” said GKC CEO Adam Gerchen.
GKC principals are subject to a three-year lock-up period and multi-year non-compete agreements.
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Burford Capital has confirmed that its acquisition of GKC Holdings, the parent of its Chicago-based rival Gerchen Keller Capital, is complete.