Acquisition of NIS

Titanium Asset Management Corp 29 February 2008 Titanium Asset Management Corp. 29 February 2008 Not for release, publication or distribution in whole or in part in or into the United States, Canada, Australia, Republic of South Africa or Japan TITANIUM ASSET MANAGEMENT CORP. PROPOSED ACQUISITION OF NATIONAL INVESTMENT SERVICES INC. WHICH HAS TOTAL MANAGED AND FEE-PAYING ASSETS OF US$4.1 BILLION MAJORITY OF STOCKHOLDERS HAVE UNDERTAKEN TO VOTE IN FAVOUR OF THE ACQUISITION NOTICE OF SPECIAL MEETING HIGHLIGHTS • Titanium announces its acquisition of National Investment Services Inc. which has total managed and fee paying assets of US$4.1 billion. This will be Titanium's third major transaction since being admitted to AIM in June 2007 • Stockholders holding a majority of the Company's common shares have already irrevocably undertaken to vote in favour of approving the acquisition • Following completion of the acquisition, the Company will have total managed and fee-paying assets of approximately US$6.9 billion • Within 120 days after the completion of the acquisition, Titanium plans to file the appropriate registration statement with the SEC and thereafter to seek a listing on Nasdaq NMS or another major United States exchange For further information: Titanium Asset Management Corp. John Sauickie, Chief Executive Officer +1 941 524 5672 Nigel Wightman, Executive Director + 44 7789 277849 Seymour Pierce Ltd Jonathan Wright +44 20 7107 8000 Penrose Financial Gay Collins +44 20 7786 4888 Kay Larsen titanium@penrose.co.uk Titanium Asset Management Corp. ('Titanium' or the 'Company') (AIM: TAM) is pleased to announce that it has entered into a conditional sale and purchase agreement to acquire the entire issued and outstanding capital stock of National Investment Services Inc. ('NIS') (the 'Acquisition'). In aggregate, following completion of the Acquisition, the Company will have total managed and fee-paying assets of approximately US$6.9 billion. The Acquisition is expected to be completed on 31 March 2008 and is conditional upon, among other things, approval by a majority of the holders of common stock in Titanium ('Stockholders') at a special meeting of the Stockholders ('Special Meeting'). Stockholders holding a majority of Titanium's common shares ('Common Shares') have already irrevocably undertaken to vote in favor of the resolution to be proposed at the Special Meeting to approve the Acquisition, thus ensuring its approval by Stockholders. The Company will be dispatching to Stockholders shortly a circular containing details of the Acquisition and a notice convening the Special Meeting. Information on Titanium The Company was formed and organised as a corporation under the laws of the State of Delaware to serve as a vehicle for the acquisition of one or more target businesses. The Company was admitted to trading on AIM on 21 June 2007 and at that time, the Company raised approximately US$110,000,000, net of expenses. In September 2007, the Company completed the acquisitions of Wood Asset Management, Inc., Sovereign Holdings, LLC and certain client mandates of Siesta Key Capital, LLC. QUALIFIED BUSINESS COMBINATION Since the Acquisition will constitute a 'Qualified Business Combination' if it is completed, it will give rise to certain events under the certificate of incorporation of the Company and various material agreements, including the following: • Stockholder approval will no longer be required for further acquisitions by the Company unless such acquisition constitutes a reverse takeover under the AIM Rules, and Stockholders will have no further rights to require the Company to repurchase their Shares; • the balance of funds in the Trust Fund, after funding the purchase price of the Acquisition and any repurchase of Shares pursuant to the exercise of Repurchase Rights, will be transferred to the Company and become unrestricted and available for general use; • the Company will use commercially reasonable efforts to file with the SEC a registration statement on Form 10 or Form S-1 within 120 days after the date of completion of the Acquisition and thereafter will seek a listing on Nasdaq NMS or another major United States exchange; and • the issued and outstanding warrants of the Company will become exercisable. REASONS FOR THE ACQUISITION The Company was formed to serve as a vehicle for the acquisition of one or more target businesses. The directors of the Company believe that the Acquisition is in line with this strategy and gives the Company the opportunity to acquire, in aggregate, approximately US$3.2 billion of assets directly managed and approximately US$0.9 billion of fee-paying assets, taking the aggregate total managed and fee-paying assets of the Company to approximately US$6.9 billion. Information on NIS NIS is an institutional investment management firm and is a Registered Investment Advisor. NIS manages approximately US$3.2 billion in customized portfolios and in private commingled funds and receives fees on a further US$0.9 billion of assets. NIS' clients include private and public sector pension funds, endowments and charities. In the year ended 31 December 2007, NIS had total management fee income of US$11.06 million and net income of US$2.56 million. As at 31 December 2007, NIS had total assets of US$5.23 million Board Changes Upon completion of the Acquisition, John Kuzan intends to step down as Chairman of the Board of Directors of the Company (the 'Board') to focus upon developing the Company's businesses, particularly Sovereign. Nigel Wightman currently a director of Titanium, and a 30-year international asset management industry veteran formerly with senior positions at State Street Global Advisors Limited, State Street Bank Europe Limited and NM Rothschild Group, will become Chairman and Robert Emmett Kelly, age 63, a founder and director of NIS, will join the Board as an Executive Director. Summary Terms of the Acquisition The Company has entered into an agreement (the 'Acquisition Agreement') with NIS, NIS Holdings Inc. and the shareholders of NIS Holdings Inc. Pursuant to the terms of the Acquisition Agreement, the Company has agreed to acquire all of the issued share capital of NIS, all upon the terms and subject to the conditions set forth in the Acquisition Agreement and in accordance with the relevant provisions of applicable law. The aggregate amount of the initial purchase price will be approximately US$30.3 million, which is comprised of the following: (i) US$24,000,000 in cash; plus (ii) the amount of retained earnings of NIS on Completion net, as verified by the Company's auditors; minus (iii) the amount by which NIS's current liabilities (excluding amounts which have previously reduced retained earnings) on the Completion date exceed $150,000; plus (iv) fifty percent (50%) of the net present value of any income tax benefits projected to be realised by the Company as a result of the treatment of the transaction by the parties for tax reasons as a sale of assets. In addition, the Company will pay certain deferred payments, as set out below, in 2009 and 2010 after completion of the audited 2008 and 2009 financial statements of NIS. In each such year the Company shall make the following payments as follows: (i) a fixed payment of US$1 million; (ii) a variable payment based upon NIS's total revenues in each such financial year; and (iii) fifty percent. (50%) of the net present value of the deferred payments as at 2009 and 2010 of any income tax benefits projected to be realised by the Company as a result of the treatment of the transaction by the parties for tax reasons as a sale of assets. It is estimated that the aggregate amount of the deferred consideration, assuming the maximum variable payments are achieved, will be in the regions of US$6.9 million. Completion of the Acquisition is conditional upon the approval of the Acquisition by the Stockholders at the Special Meeting. Circular and Special Meeting A circular setting out details of the Acquisition and including the notice of the Special Meeting, accompanied by a proxy card and a redemption card, is being posted to Stockholders shortly. The record date will be 14 March 2008, and the Special Meeting has been convened for 3 p.m. (UK time) / 10 a.m. (EDT) on 26 March 2008 at the offices of Orrick, Herrington & Sutcliffe LLP, 666 Fifth Avenue, New York, NY 10103-0001, U.S.A. Copies of the circular will be available to the public free of charge from today at the offices of Seymour Pierce Limited, 20 Old Bailey, London EC4M 7EN during normal business hours on any weekday (other than Saturdays, Sundays and public holidays), until one month following the completion of the Acquisition and will be available for review and download at www.ti-am.com. For further information: Titanium Asset Management Corp. John Sauickie, Chief Executive Officer +1 941 524 5672 Nigel Wightman, Executive Director + 44 7789 277849 Seymour Pierce Ltd Jonathan Wright +44 20 7107 8000 Penrose Financial Gay Collins +44 20 7786 4888 Kay Larsen titanium@penrose.co.uk This announcement does not constitute, or form part of, an offer or an invitation to purchase any securities or to carry on any investment activity whatsoever. This information is provided by RNS The company news service from the London Stock Exchange
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