Source: Sharecast
CCLA manages more than £15bn in assets under management on behalf of charities, religious institutions and local authorities.
Jupiter said the deal is "highly compelling" from strategic, cultural and financial perspectives, delivering progress against multiple objectives.
It said the acquisition marks a significant step forward in delivering on its key strategic objective of increasing scale, specifically within its home market of the UK. It also opens up a new client channel and provides complementary investment expertise "with a high degree of cultural alignment".
The acquisition is expected to be materially accretive to management fee earnings per Jupiter share from day one, with further accretion over time as synergies are delivered.
The initial target for run-rate cost synergies on a fully integrated basis is at least £16m a year and this target is expected to be fully realised by the end of 2027.
Chief executive Matthew Beesley said: "This Acquisition helps us to increase scale in our home market of the UK, where Jupiter is already a leading player, without any disruption to our existing clients. It opens up a new client segment for us, broadening our appeal to a range of charitable and religious institutions, both in the UK and internationally, while also allowing us to expand our existing presence in the UK Local Authority sector.
"Importantly, Jupiter and CCLA share a common set of values, and each has a client-centric culture and history of focusing on active and differentiated investment solutions."
The acquisition will be funded entirely from existing balance sheet cash resources and no new equity or debt will be issued.
At 0945 BST, the shares were up 12% at 121.40p.
Dan Coatsworth, investment analyst at AJ Bell, said: "The latest in a long line of consolidation within the asset management industry sees CCLA being bought by Jupiter.
"This looks to be one of these deals that makes a lot of sense given the lack of crossover across the fund range, with CCLA having a clear specialism in the ethical investment and stewardship space.
"Jupiter has a history with this type of investing given its long-standing Ecology fund. However, its capability has always looked light in an area that will likely become mainstream over time despite the recent challenges that have come from responsible investment.
"The acquisition of CCLA also diversifies the client base of Jupiter given the heritage of the target with charity, local authority and Church of England investors, which makes the deal look sensible from a business perspective. Jupiter will need to convince these clients that it will continue to hold CCLA’s core principles at the heart of its investment approach.
"With little crossover of funds, Jupiter will be looking to see what cost savings can be made behind the scenes as it looks to increase scale to tackle the challenges that passive investing brings to those pursuing an active led approach. Jupiter is not alone in this regard and therefore it seems highly likely we see further M&A activity in the asset management sector."
