Consolidation now

18 October 2010 By Neil Unmack Follow @unmack1

The Canadian bank is paying a heftylooking 17 times expected earnings for the specialist credit fund manager. RBC has successfully absorbed other such deals, and its target is growing fast. If it can also boost BlueBay s U.S. presence, the price will be more than justified.

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Royal Bank of Canada announced on Oct. 18 that it had agreed to buy Londonbased BlueBay Asset Management for 485 pence per share, valuing the fund management group at 963 million pounds.

The deal values BlueBay at approximately 17 times forecast earnings for the year to June 2011, according to estimates from Numis Securities. BlueBay manages $40 billion of funds, spanning credit, distressed debt and emerging markets.

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