Exhibit 99.2
WisdomTree Announces 15% Earnings Accretive Settlement of Contractual Gold Payments
Transaction Expands WisdomTree’s Operating Margin by 530 Basis Points and is 15% Accretive to 2023
Consensus EPS Estimates
Transaction Valued at ~$137 Million
($50 Million in Cash and Non-Voting Preferred Shares Convertible into 13.1 Million Shares of
WisdomTree Common Stock)
WisdomTree will Host a Call on Wednesday, May 10th at 6:00 p.m. ET to Discuss the Transaction
NEW YORK, May 10, 2023 – WisdomTree, Inc. (NYSE: WT) (“WisdomTree” or the “Company”), a global financial innovator, today announced the closing of a transaction resulting in a full resolution of WisdomTree’s contractual gold payments obligation to ETFS Capital Limited (“ETFS Capital”) for approximately $137 million. The transaction is approximately 15% accretive to 2023 consensus earnings per share (“EPS”) estimates.
WisdomTree CEO Jonathan Steinberg said, “I am pleased that the WisdomTree team was able to deliver such a positive result to stockholders. This deal is not only accretive to EPS, but also expands operating margins by 530 basis points, cleans up our balance sheet and reduces volatility in our quarterly GAAP financial results.”
In 2018, WisdomTree assumed an obligation to pay ETFS Capital fixed payments of 9,500 ounces of gold per year in connection with the Company’s acquisition of the European exchange-traded commodity, currency and leveraged-and-inverse business of ETFS Capital. This obligation mirrored existing obligations of ETFS Capital to pay a subsidiary of the World Gold Council (“WGC”) two-thirds and Rodber Investments Limited (“RIL”) one-third of those contractual gold payments – in perpetuity to the WGC and through March 31, 2058 to RIL. The contractual gold payments expense was approximately $17.1 million during the year ended December 31, 2022, and approximately $4.5 million during the quarter ended March 31, 2023.
Under the terms of the transaction, Gold Bullion Holdings (Jersey) Limited, a subsidiary of the WGC, received approximately $4.4 million in cash and non-voting preferred shares convertible into approximately 13.1 million shares of WisdomTree common stock. RIL, an entity controlled by Graham Tuckwell, who is also Chairman of ETFS Capital, received approximately $45.6 million in cash.
The annual impact of the transaction on the Company’s financial results adds approximately $18 million to operating income, expands WisdomTree’s operating margin by 530 basis points, yields a net income lift of more than $13 million and is approximately 15% accretive to current 2023 consensus EPS estimates. Furthermore, the transaction extinguishes the Deferred Consideration – Gold Payments liability of approximately $180 million reflected on the Company’s balance sheet at March 31, 2023.
For further information regarding the terms and conditions contained in the definitive transaction agreements among WisdomTree, the WGC, ETFS Capital and certain of their respective subsidiaries and affiliates, see WisdomTree’s Current Report on Form 8-K, which will be filed with the Securities and Exchange Commission (“SEC”) in connection with the transaction.