Mutual Risk Management (MRM), parent company of leading hedge fund administrator Hemisphere, announced on February 19 that the business was for sale. The company has received a number of bids and is engaged in negotiations with a potential purchaser. The rumour mill initially fingered Morgan Stanley, but sources close to Hemisphere indicate this is unlikely.
MRM expects to execute a definitive agreement prior to March 5 and to close the transaction prior to March 31, 2002. The Company currently expects to receive cash proceeds of approximately $110 million from the sale and to report a gain on the sale of at least $100 million, or $1.57 per diluted share. In 2001, Hemisphere produced revenues of $33.5 million and net income, after minority interest, of $7.0 million, or $0.17 per diluted share. The sale requires the consent of the Company’s banks and debenture holders and a portion of the proceeds will likely be used to reduce debt.