Victory Capital Announces Acquisition of First Eagle; $3.5B Financing Commitments

What Happened
Victory Capital Holdings, Inc. announced on August 25, 2026 that it signed an Agreement and Plan of Merger to acquire GC Ferry Holdings, Inc. (“First Eagle”) from GC Ferry Parent, L.P. (majority owned by Genstar). The deal contemplates a two-step merger and will pay consideration in a mix of cash, newly issued Victory common stock (targeting 4.9% of outstanding shares post-close), and a new Series B non‑voting convertible preferred stock (or, if Company stockholder approval is not obtained, a mix that limits equity issued and issues cumulative perpetual preferred stock instead).

Key Details

• Merger Agreement signed August 25, 2026; outside termination date May 25, 2027 (subject to extension).
• Financing commitments (Commitment Parties include Bank of America and RBC): up to $3.5 billion incremental term loan, up to $200 million new revolving facility, and up to $950 million secured bridge facility (bridge reduced by any secured notes issued).
• Share consideration: newly issued common stock representing 4.9% of Company common stock post-close plus Series B Non‑Voting Convertible Preferred Stock; if stockholder approval for issuance is not obtained, share issuance is capped and remaining consideration would be in newly issued cumulative perpetual preferred stock.
• Closing conditions include HSR clearance, other regulatory approvals, absence of material legal restraints, accuracy of reps and warranties, covenants performance, and client consents covering at least 75% of the Base Revenue Run‑Rate at closing (purchase price adjustments if client consents do not cover at least 92.5%; true‑up payments possible within one year).
• Shareholder Agreement at closing grants Seller/Genstar resale and piggyback registration rights, participation rights, board nomination rights (2 directors while holding ≥50% of holder share amount; 1 while ≥33%), a 3‑year lock‑up and standstill with specified post‑standstill ownership limits (generally up to 24.9% after exceptions).
• Preferred terms: Series B non‑voting convertible preferred generally non‑voting and not holder‑convertible (auto‑converts on transfer to unaffiliated third party); cumulative perpetual preferred (if used) would carry an initial 8.0% annual dividend on a $1,000 liquidation preference, rising 1.0% annually up to 15.0%.

Why It Matters
This is a material acquisition that will change Victory Capital’s size, capital structure and shareholder mix. The transaction is financed primarily by new secured debt facilities and a mix of equity and preferred securities, which could meaningfully increase Victory’s leverage pending repayment/de‑levering plans. The issuance of new equity and preferred securities, and board nomination and registration rights for the seller, are important governance and dilution considerations for existing shareholders. Closing depends on regulatory approvals, client consents, and a shareholder vote to approve the equity issuance, so completion and final economic terms remain subject to customary closing conditions and adjustments.