SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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): June 5, 2003
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EATON VANCE CORP.
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(Exact name of registrant as specified in its charter)
Maryland 1-8100 04-2718215
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
255 State Street, Boston, Massachusetts 02109
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617)482-8260
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INFORMATION INCLUDED IN THE REPORT
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE
Registrant has entered into a definitive agreement to acquire 80% of
the equity of Parametric Portfolio Associates as described in Registrant's news
release dated June 5, 2003, a copy of which is filed herewith as Exhibit 99.1
and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(c) Exhibits
Exhibit No. Document
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99.1 Press release issued by the Registrant dated
June 5, 2003
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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 hereunto duly authorized.
EATON VANCE CORP.
(Registrant)
Date: June 5, 2003 /s/ William M. Steul
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William M. Steul, Chief Financial Officer
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EXHIBIT INDEX
Each exhibit is listed in this index according to the number assigned to it
in the exhibit table set forth in Item 601 of Regulation S-K. The following
exhibit is filed as part of this report:
Exhibit No. Description
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99.1 Copy of registrant's news release dated June 5, 2003.
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Exhibit 99.1
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NEWS RELEASE
EATON VANCE CORP.
The Eaton Vance Building
255 State Street, Boston, MA 02109
(617) 598-8036
Contact: Meg Pier
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FOR IMMEDIATE RELEASE
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EATON VANCE TO ACQUIRE 80% INTEREST IN PARAMETRIC PORTFOLIO ASSOCIATES
STRATEGIC EXPANSION OF EATON VANCE'S TAX-MANAGED AND SEPARATE ACCOUNT BUSINESSES
BOSTON, MA, JUNE 5, 2003--Eaton Vance Corp. (EV), a Boston-based investment
management firm with $62 billion in assets under management, today announced the
signing of a definitive agreement to acquire 80 percent of the stock of
Parametric Portfolio Associates.
Parametric is a leading investment management firm based in Seattle, Washington,
with $4.7 billion in assets under management. The company's primary business is
managing separate accounts for high net-worth investors, using proprietary
systems to customize client portfolios, control risk, and minimize taxes.
"This is an important strategic acquisition for Eaton Vance. It enhances and
diversifies our leadership position in tax-managed investing, and it
significantly increases our presence and potential in the market for separately
managed accounts," said James B. Hawkes, Chairman and CEO of Eaton Vance Corp.
"We believe that Parametric's reputation as a leader in customized portfolio
technology, its strong investment performance record, and its key business
relationships, when combined with Eaton Vance's powerful distribution system and
other resources, create a unique potential for growth. With an emphasis on
managing portfolios for after-tax returns, Parametric shares Eaton Vance's
commitment to serving the distinct investment needs of taxpayers ."
The acquisition agreement provides that Eaton Vance will acquire 80 percent of
Parametric's stock for $28 million in cash. Shareholders of the remaining 20
percent, consisting of Parametric's current investors and key executives, will
have annual rights beginning in 2006 to sell their shares to Eaton Vance, and
Eaton Vance will also have certain rights to purchase such shares, over an
eight-year period at prices based on a multiple of Parametric's prior year's
earnings before interest and taxes. Eaton Vance does not expect the transaction
to result in dilution of its earnings per share for its current fiscal year
ending October 31, 2003, and expects the transaction to add to earnings per
share in future years. The Board of Directors of Eaton Vance Corp. and
Parametric's shareholders have approved the acquisition agreement. The
transaction is expected to close in August.
Parametric offers two principal products: actively-managed core investment
portfolios which seek to outperform, on an after-tax basis, client-specified
benchmarks (ATIndex(TM)), and overlay portfolio management for multi-manager or
multi-style accounts (Integrated Separate Account Management - ISAM(TM)). Its
clients include family offices, high net worth investors, leading financial
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intermediaries, and some of the nation's largest financial services
organizations. Parametric's proprietary investment technology that manages risk,
tax, and other variables is highly scalable, allowing separate accounts to be
managed and customized on a mass basis through financial intermediaries for
single manager or multi-manager/style offerings. Parametric participates in a
variety of traditional managed account programs and has been selected to provide
its ISAM services to a number of prominent managed account sponsors, including
SEI, Morgan Keegan, and Lockwood.
Parametric was founded in 1987 and is led by Chief Executive Officer Brian
Langstraat and Chief Investment Officer David M. Stein. The firm is owned
through a holding company whose shareholders include Orca Bay Partners, a
Seattle-based private equity firm, and by Parametric's senior management and
other key employees. Following the acquisition, Parametric will become a
subsidiary of Eaton Vance and will operate as a distinct and autonomous business
unit headquartered in Seattle. All members of Parametric's management team will
continue in their current capacities and sign long-term employment contracts,
and all employees will become shareholders of Eaton Vance.
"We are excited about combining our capabilities with those of Eaton Vance,"
said Brian Langstraat. "Our shared focus on taxpaying investors and separately
managed accounts will lead to further innovation and opportunities for both
firms. In addition, Eaton Vance's resources and its commitment to maintain the
operational autonomy of Parametric make this affiliation attractive to our
clients and employees, both present and future."
Mr. Hawkes noted, "The separately managed account industry is growing as private
investors demand customized financial planning and investment tools. A recent
Money Management Institute/Financial Research Corporation report projects that
broker/dealer managed account programs, which totaled approximately 2.04 million
accounts and $398 billion in assets at year-end 2002, will grow to 5.3 million
accounts and $930 billion in assets by 2006. In this environment, Parametric's
proprietary systems and value-added products are a strategic complement to Eaton
Vance's overall business, both in terms of its focus on taxpaying high-net-worth
clients and its participation in the rapidly growing managed account business.
This transaction builds on Eaton Vance's already strong commitment to offering a
comprehensive managed account capability."
In 2001, Eaton Vance acquired majority interests in Atlanta Capital Management
Company, LLC and Fox Asset Management LLC, both of which have a focus on the
separately managed account business. Atlanta Capital has particular expertise in
the management of large-cap growth equities, fixed-income assets, and small-cap
equity products. Fox has expertise in traditional value investing, as well as
fixed-income and balanced portfolios. Eaton Vance also provides an array of
investment products for the separate account market. In total, Eaton Vance and
its affiliates have more than $11.0 billion in institutional, high-net-worth and
retail managed accounts and participate in over 40 broker/dealer managed account
programs.
UBS Warburg acted as financial advisor to Eaton Vance in connection with this
transaction. Berkshire Capital Corporation acted as financial advisor to
Parametric. Eaton Vance is traded on the New York Stock Exchange under the
symbol EV.
This news release contains statements that are not historical facts, referred to
as "forward looking statements." Eaton Vance's actual future results may differ
significantly from those stated in any forward looking statements, depending
upon factors discussed in Eaton Vance's Annual Report or Form 10-K for the
fiscal year ended October 31, 2002, and its Quarterly Reports on Form 10-Q,
including market and other economic conditions.
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