UPDATE 1-L&G buys rest of Cofunds for 131 mln pounds
LONDON, March 26 (Reuters) - British insurer Legal & General has agreed to buy the 75 percent of Cofunds Holdings it does not already own, in a deal valuing the investment fund supermarket at 175 million pounds ($266 million).
Buying the rest of Cofunds using 131 million pounds of L&G's cash reserves will help it reach a goal to expand in the investment platform business, the company said in statement on Tuesday.
It expects the deal to conclude within the first half of the year and to boost its own profits by the end of 2014.
Fund supermarkets provide investment advisors and clients with administration and management services for their portfolios.
Founded in 2001, Cofunds has more than 50 billion pounds in assets under administration and a 22 percent share of the UK investment platform market, L&G said.
Following the acquisition, L&G's Savings division will have assets under administration of 103 billion pounds.
L&G said it expected cost savings associated with the deal to be 11 million pounds per year from 2015, with a one-off investment cost of around 17 million pounds.