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Victory Capital Holdings Inc. is acquiring USAA Asset Management Co. in a deal that will move the company into the top tier of mutual fund providers and money managers in the country.

The deal – which includes USAA’s Mutual Fund and ETF businesses and 529 College Savings Plan – is the second in as many months for Victory Capital. In September, the company said it would pay $300 million to acquire Harvest Volatility Management, a derivatives investment firm.

San Antonio-based USAA Asset Management was formed to serve the investment needs of the military community and their families. As of September 30, it had $69.2 billion in assets under management and 53 investment funds. Victory Capital would have approximately $144.4 billion in firmwide assets under management at the close of the transaction.

Under terms of the purchase agreement, Victory Capital will pay $850 million plus the opportunity for additional contingent payments based on future business performance. Victory Capital expects to finance the transaction through a combination of debt and cash on hand. It is expected to result in significant accretion to earnings per share, as well as value creation for Victory Capital shareholders through expense synergies and the opportunity for meaningful organic growth.

USAA Asset Management will become Victory Capital’s 11th investment franchise and it will have the rights to offer products and services using the USAA brand.

“The acquisition of USAA Asset Management Co. is a strong diversifier for us with the addition of quality investment teams and products and provides us entry into a new distribution channel with a loyal member base made up of members of the military community and their families,” Victory Capital CEO David Brown said in a statement. “It increases our size and scale, enhances our ability to attract and retain top investment talent, and leverages our investments in critical components of our business, such as technology, operations, investment support and client service, across a broader base of assets.”

In an interview with Institutional Investor, Brown said Victory Capital won a highly competitive auction process to land USAA Asset Management. Victory paid about 6.9 times EBITDA, he said.

The deal will push Victory Capital into the top 25 U.S. mutual fund providers and top 50 U.S. money managers based on assets under management, Brown told the publication.

Based on assets under management on September 30, Victory Capital’s assets under management by asset class pro forma for the acquisition would be 48 percent equities, 26 percent solutions, 19 percent fixed income and 7 percent money market.

The acquisition is expected to close in the second quarter of 2019, and is subject to regulatory and other customary approvals, conditions and consents, including approval by USAA mutual fund and ETF shareholders and board of trustees.