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Perpetual share price on watch after ESG acquisition

Kenneth Hall
Businessman paying Australian money

The Perpetual Limited (ASX: PPT) share price is one to watch today after buying a US-based investment firm for A$54 million.

Why is the Perpetual share price on watch?

Perpetual will acquire Trillium Asset Management (Trillium), a specialist environmental, social and governance (ESG) investment firm with A$5.5 billion in funds under management (FUM).

The Aussie investment firm will establish a US distribution arm to accelerate Trillium’s growth and support any future acquisitions. Perpetual will acquire 100% of Trillium plus an earnout to ensure future growth alignment. 

Trillium has one of the longest track records globally within ESG investors since being founded in 1982. The transaction is consistent with Perpetual’s strategic intention to grow its capabilities across geographies and investment strategies.

I would be keeping an eye on the Perpetual share price in early trade to see how investors take in the buyout news.

The new US distribution team will be responsible for driving the growth of Trillium’s ESG and impact investment products across the US. Trillium CEO Matthew Patsky said that Perpetual is a partner that supports the group’s overall mission.

Perpetual is looking to complete the deal by the end of financial year, subject to regulatory and other customary approvals.

How has Perpetual performed on the ASX?

It’s been a difficult run for Perpetual shareholders in recent years, with the group’s shares falling 17.49% in the last 5 years.

However, since bottoming out at the end of 2018, the Perpetual share price is up a tidy 34.92%. That’s better than many of its ASX Financials peers, which have struggled to climb higher in recent months.

Perpetual is still yielding 6.04%, which puts it amongst the top ASX dividend shares on the market. The group’s shares trade at a P/E ratio of 16.80, which means there could be value in the investment firm.

Foolish takeaway

Keep an eye on the Perpetual share price when the market opens today. Investors will be weighing up the ESG and US expansion versus the $54 million acquisition price.

The post Perpetual share price on watch after ESG acquisition appeared first on Motley Fool Australia.

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Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2020