8-K 1 c18367e8vk.htm CURRENT REPORT e8vk
 

 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 31, 2007
NUVEEN INVESTMENTS, INC.
(Exact name of registrant as specified in its charter)
         
Delaware   1-11123   36-3817266
(State or other   (Commission File Number)   (IRS Employer
jurisdiction of       Identification
incorporation)       Number)
         
333 West Wacker Drive, Chicago, Illinois
  60606
(Address of principal executive offices)
  (Zip Code)
(312) 917-7700
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 

 


 

Item 8.01 Other Events
     On August 31, 2007, Nuveen Investments, Inc. (“we,” “us,” “Nuveen Investments,” or the “Company”) and other named defendants entered into a Memorandum of Understanding (“MOU”) with the plaintiffs in the putative class action lawsuits filed in the Circuit Court of Cook County, Illinois, Chancery Division, consolidated under the caption Robert Summerfield v. Nuveen Investments, Inc., et al., Case No. 07CH 16315, and in the Court of Chancery of the State of Delaware in and for New Castle County, captioned Brockton Contributory Retirement Sys. v. Nuveen Investments, Inc., Case No. 3060. These actions, as previously disclosed in our Definitive Proxy Statement filed with the Securities and Exchange Commission on August 14, 2007 (the “Definitive Proxy Statement”), were filed in connection with the Agreement and Plan of Merger (the “merger agreement”) entered into by Nuveen Investments on June 19, 2007, providing for the acquisition of Nuveen Investments by a group of private equity investors led by Madison Dearborn Partners, LLC.
     Under the terms of the MOU, Nuveen Investments, the other named defendants and plaintiffs have agreed to settle the above actions. Nuveen Investments and the other defendants deny the allegations in the actions and deny having committed, or having aided and abetted, any breach of fiduciary duty or other violation of state or federal law in connection with the entry into the merger agreement. The settlement will be subject to customary conditions, including court approval following notice to members of the proposed settlement class. If approved by the court, the settlement will resolve all claims that were or could have been brought on behalf of the proposed settlement class in the actions being settled, including all claims relating to the merger, the merger agreement and any disclosure made in connection therewith. In addition, as part of the proposed settlement, we have agreed to pay $1,000,000 to the plaintiffs’ counsel for their fees and expenses, subject to final approval of the settlement and such fees by the court. The merger may be consummated prior to final court approval of the settlement.
     The MOU will not affect the amount of consideration to be paid to the stockholders of Nuveen Investments in connection with the merger. In addition, the MOU will not affect the timing of the special meeting of stockholders of Nuveen Investments to consider and vote upon a proposal to adopt the merger agreement, which is scheduled to be held on September 18, 2007.
     Pursuant to the MOU, we have agreed to make the supplemental disclosures set forth below; however, the Company does not make any admission that such supplemental disclosures are material or that its prior disclosures were in any way inadequate or misleading. Important information concerning the proposed merger is set forth in the Definitive Proxy Statement. The information set forth herein should be read in conjunction with the Definitive Proxy Statement. Capitalized terms used herein shall have the meanings ascribed thereto in the Definitive Proxy Statement.
Supplemental Disclosures
1.   The following disclosure appearing on page 41 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Goldman, Sachs & Co.—Trading Statistics for Selected Public Asset Managers Analysis”:
     Goldman Sachs calculated the selected companies’ ratios of current stock price / estimated calendar years 2007 and 2008 earnings per share and compared those calculations to our results based on our current market price and the proposed transaction price. The following table presents the results of this analysis:
                                 
                    Nuveen Investments
Ratio   Range   Median   Current Price   Transaction Price
Price / 2007E Earnings per Share
    15.8x - 30.1 x     19.4 x     20.5 x     24.5 x
Price / 2008E Earnings per Share
    14.1x - 23.8 x     16.8 x     17.4 x     20.9 x
 
*   Price/Earnings ratios based on median IBES earnings estimates for calendar year. Market data as of June 18, 2007.

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     Goldman Sachs also calculated and compared the ratio of levered market cap, calculated as equity value plus net debt, to each of most recent assets under management (“AUM”), last quarter annualized (“LQA”) revenue and last quarter annualized earnings before interest, taxes, depreciation and amortization (“EBITDA”). The following table presents the results of this analysis:
                                 
                    Nuveen Investments
Ratio   Range   Median   Current Price   Transaction Price
Levered Market Cap / AUM
    1.4% - 6.8 %     3.2 %     3.2 %     3.8 %
Levered Market Cap / LQA Revenue
    3.0x - 7.1 x     4.8 x     6.6 x     7.9 x
Levered Market Cap / LQA EBITDA
    10.6x - 19.2 x     13.7 x     13.8 x     16.5 x
 
*   All figures based on data from publicly available filings and SNL Financial. Market data as of June 18, 2007.
is supplemented with the following disclosure setting forth certain details behind the summary results presented:
                                                                 
    Price/   Price/                        
    2007E   2008E   Levered Market Cap(1) /                   2008E
    Earnings   Earnings           LQA   LQA   Div.   IBES   P/E to
Company   per Share   per Share   AUM   Revenue   EBITDA(2)   Yield   Growth(3)   Growth
Nuveen Investments (June 18, 2007 Price)
    20.5 x     17.4 x     3.2 %     6.6x       13.8 x     1.8 %     12.0 %     1.5 x
Nuveen Investments (Transaction Price)
    24.5       20.9       3.8       7.9       16.5       1.5       12.0       1.7  
 
                                                               
Peers
                                                               
Franklin Resources
    18.7 x     16.7 x     5.4 %     4.8 x     14.0x       0.4 %     16.0 %     1.0 x
Alliance Bernstein
    17.9       15.4       3.1       5.2       19.2       4.2       18.7       0.8  
Blackrock(4)
    22.1       18.9       1.7       4.2       14.7       1.7       25.0       0.8  
T. Rowe Price
    23.0       19.6       4.1       7.1       16.2       1.3       12.0       1.6  
Legg Mason
    19.4       16.6       1.4       3.0       10.7       0.8       15.0       1.1  
Amvescap
    15.8       14.1       2.3       3.9       10.6       1.7       15.0       0.9  
Eaton Vance(5)
    29.8       20.7       4.1       5.9       16.6       1.1       15.0       1.4  
Janus Capital
    30.1       23.8       3.2       5.3       17.0       0.1       18.0       1.3  
Affiliated Managers
    19.1       16.8       2.3       4.5       11.8       0.0       14.0       1.2  
Federated Investors
    17.9       16.0       1.6       3.8       11.3       2.2       10.0       1.6  
Calamos(6)
    19.8       18.8       6.8       6.1       13.7       1.7       9.5       2.0  
Waddell & Reed
    17.6       15.3       4.6       3.0       11.6       2.3       12.5       1.2  
Cohen & Steers
    25.4       22.2       5.4       5.7       12.6       1.7       15.0       1.5  
 
                                                               
High
    30.1 x     23.8 x     6.8 %     7.1 x     19.2 x     4.2 %     25.0 %     2.0 x
Low
    15.8       14.1       1.4       3.0       10.6       0.0       9.5       0.8  
Median
    19.4       16.8       3.2       4.8       13.7       1.7       15.0       1.2  
 
*   All figures based on data from publicly available filings and SNL Financial.
 
(1)   Preferred stock and capital securities are given 50% equity credit. Run-rate calculated by annualizing the most recent quarter figures.
 
(2)   Contingent deferred sales charges amortization not excluded from EBITDA.
 
(3)   IBES stands for Institutional Brokers’ Estimate System.

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(4)   Pro forma for acquisition of Merrill Lynch Investment Managers.
 
(5)   Financial data as of April 30, 2007.
 
(6)   Calamos share count based on assumption that all shares are converted.
2.   The following disclosure appearing on page 42 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Goldman, Sachs & Co.—Analysis of Selected Precedent Mergers and Acquisition Transactions”:
     For each of the precedent transactions, Goldman Sachs calculated and compared, among other things, the ratio of the estimated transaction value to the: (1) target company’s last twelve months EBITDA (“LTM EBITDA”); (2) target company’s last twelve months revenue (“LTM Revenue”); and (3) percentage of the target company’s AUM.
     The following table sets forth the results of this analysis:
                                 
                            Nuveen
                            Investments/Parent
Ratio   Range   Mean   Median   Transaction
Transaction Value / LTM EBITDA
    7.3x - 18.5 x     11.8 x     12.3 x     18.0 x(1)
Transaction Value / LTM Revenue
    1.9x - 5.7 x     3.7 x     3.7 x     8.4 x
Transaction Value / AUM
    0.8% - 10.6 %     3.2 %     2.0 %     3.8 %
 
(1)   Nuveen Investments’ LTM EBITDA excludes Other Income / (Expense). Other Income / (Expense) includes gains and losses on investments and miscellaneous income, including gain or loss on the disposal of assets.
is supplemented with the following disclosure setting forth certain details behind the summary results presented:
                                         
                    Transaction Value /
        Size       LTM   LTM    
Date   Target/Acquirer   ($mm)   Consideration   EBITDA   Revenue   AUM %
 
Feb-07
  Putnam Investments / Great-West   $ 3,900     Cash     12.9 x     2.8 x     2.0  
Jul-06
  WM Advisors / Principal     740     Cash     12.3       N/A       2.8  
Feb-06
  ML Asset Management / BlackRock     9,487     Stock     15.3       5.5       1.8  
Jun-06
  Citigroup / Legg Mason     3,700     Cash / Asset     9.3       2.1       0.8  
Aug-04
  State Street Research / BlackRock     449     Cash     9.5       1.9       0.9  
Jul-03
  Neuberger Berman / Lehman Brothers     2,625     Cash / Stock     12.9       4.5       4.1  
Jun-00
  Bernstein / Alliance     3,500     Cash / Stock     10.5       N/A       4.1  
Jun-00
  United Asset Management / Old Mutual     2,225     Cash     7.3       2.5       1.2  
Jun-00
  Nvest / CDC     2,220     Cash     12.3       N/A       1.6  
May-00
  Pioneer / Unicredit     1,259     Cash     18.5       5.7       5.0  
May-00
  Trimark / AMVESCAP     1,810     Cash     9.2       4.8       10.6  
 
                                       
Low
      $ 449           7.3 x     1.9 x     0.8 %
Mean
        2,901           11.8       3.7       3.2  
Median
        2,225           12.3       3.7       2.0  
High
        9,487           18.5       5.7       10.6  
 
                                       
Jun-07
  Nuveen Investments / Parent   $ 6,302     Cash     18.0 x(1)     8.4 x     3.8 %
 
Source: Public filings, public investor presentations and press releases.
 
(1)   Nuveen Investments’ LTM EBITDA excludes Other Income / (Expense). Other Income / (Expense) includes gains and losses on investments and miscellaneous income, including gain or loss on the disposal of assets.

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3.   The disclosure appearing on pages 42-43 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Goldman, Sachs & Co.—Illustrative Discounted Cash Flow Analysis” is supplemented with the following information:
     Illustrative Discounted Cash Flows Analysis. Goldman Sachs performed an illustrative discounted cash flow analysis (“DCF”) to determine the implied present value of our common stock. As part of its analysis, Goldman Sachs used discount rates ranging from 11% to 13% and illustrative terminal EBITDA multiples ranging from 11x to 15x based on estimated 2011 EBITDA multiples for Nuveen Investments. The illustrative discount rate range was derived by utilizing a weighted average cost of capital analysis based on certain financial metrics for Nuveen Investments and selected companies that exhibited similar business characteristics to Nuveen Investments. The applied discount rates were based upon Goldman Sachs’ judgment of an illustrative range based upon the above analysis. The illustrative terminal EBITDA multiple range was based on Nuveen Investments’ 5-year average LTM EBITDA multiple of approximately 12.6x as well as the historical LTM EBITDA multiples of selected companies that exhibited similar business characteristics to Nuveen Investments. To conduct this analysis, Goldman Sachs used two sets of projections based on, respectively, (1) projections of our management (“Management Projections”) and (2) analyst median estimates (“Analyst Median Projections”).
     Set forth below are certain figures used to calculate the free cash flow for purposes of the illustrative discounted cash flow analysis based on our management’s projections (dollars in millions):
                                         
    Fiscal Year End
    2007E   2008E   2009E   2010E   2011E
 
Tax-adjusted EBIT
  $ 233     $ 254     $ 280     $ 315     $ 347  
Plus: Depreciation & Amortization
  $ 19     $ 19     $ 19     $ 19     $ 19  
Less: Capital Expenditures
    (19 )     (19 )     (19 )     (19 )     (19 )
Less: Change in Net Working Capital
    (5 )     (4 )     (4 )     (5 )     (6 )
Less: Cash LLC Payments
    (37 )     (101 )     (45 )     (160 )     (84 )
 
Free Cash Flows
  $ 191     $ 150     $ 231     $ 150     $ 258  
 
     Set forth below are certain figures used to calculate the free cash flow for purposes of the illustrative discounted cash flow analysis based on analyst median projections (dollars in millions):
                                         
    Fiscal Year End
    2007E   2008E   2009E   2010E   2011E
 
Tax-adjusted EBIT
  $ 235     $ 272     $ 302     $ 337     $ 376  
Plus: Depreciation & Amortization
  $ 19     $ 19     $ 19     $ 19     $ 19  
Less: Capital Expenditures
    (19 )     (19 )     (19 )     (19 )     (19 )
Less: Change in Net Working Capital
    (6 )     (6 )     (6 )     (6 )     (7 )
Less: Cash LLC Payments
    (37 )     (101 )     (45 )     (160 )     (84 )
 
Free Cash Flows
  $ 191     $ 165     $ 252     $ 171     $ 285  
 
4.   The following disclosure appearing on page 49 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Sandler O’Neill & Partners, L.P.—Comparable Company Analysis” is supplemented as follows (new text is underlined):
     The analysis compared the publicly available financial and market trading information for Nuveen Investments and the peer group as of and for the twelve-month period ended March 31, 2007, with pricing data as of June 15, 2007. The data are summarized in the table below.

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    Comparable Group Analysis
    Nuveen Investments   Nuveen Investments                
    Current   Offer                
    Price(3)   Price(3)   Peer Group Median   Peer Group Mean   Peer Group High   Peer Group Low
Price/52 Week High Closing Price (%)
    97.1       116.6       94.1       89.8       99.9       60.8  
 
                                               
Price/GAAP2007 Earnings Per Share(1)
    20.6       24.5       19.2       22.1       32.6       17.8  
 
                                               
Price/GAAP2008 Earnings Per Share(1)
    17.5       20.8       17.0       18.0       23.4       14.0  
 
                                               
2007 PEG Ratio(2)
    1.6       1.9       1.5       1.8       3.9       1.1  
 
                                               
Enterprise Value/Last Twelve Months EBITDA
    13.2       16.3       13.4       15.4       25.5       8.5  
 
                                               
Enterprise Value/Last Twelve Months Revenue
    6.9       8.6       5.3       5.2       8.2       2.9  
 
                                               
Enterprise Value/AUM (%)
    3.1       3.8       3.9       3.9       6.8       1.5  
 
                                               
 
(1)   An evaluation of the transaction price relative to the Company’s projected 2007 and 2008 earnings per share estimates provided by the
    Company. 2007 and 2008 EPS based on median I/B/E/S analyst estimates.
 
(2)   Represents Price/GAAP 2007 Earnings Per Share as a multiple of median I/B/E/S analyst long term growth rates.
 
(3)   Enterprise value includes equity of $5,767 million, debt of $595 million, minority interest of $41 million, less cash and cash equivalents of $107 million.
Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings and Reports, SNL Financial
5.   The following disclosure appearing on page 50 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Sandler O’Neill & Partners, L.P.—Analysis of Selected Merger Transactions”:
     Analysis of Selected Merger Transactions. Sandler O’Neill reviewed 30 merger transactions announced from January 1, 2000 through June 15, 2007 involving asset management companies. Sandler O’Neill reviewed the following high, low, mean and median multiples related to those selected merger transactions: transaction price at announcement to 30 day prior market price, transaction value to last twelve months’ net income, transaction value to last twelve months revenue, transaction value to last twelve months EBITDA and transaction value to assets under management. As illustrated in the following table, Sandler O’Neill derived imputed ranges of values per share for our common stock of $36.15 to $65.74 based upon the median multiples for the asset management companies.
Comparable Transaction Multiples
                 
    Median   Median
    Group   Implied
    Multiple   Value
Last Twelve Months Revenue (1) (2)
    5.1 x   $ 36.15  
Last Twelve Months EBITDA (1) (2)
    11.1 x   $ 42.26  
Last Twelve Months EPS
    24.0 x   $ 56.40  
Premium to 30 Day Prior Market
    24.0 %   $ 65.74  
MRQ AUM (1) (2)
    2.3 %   $ 36.24  
 
(1)   For Median Imputed Value, equity value derived from enterprise value by adjusting for debt of $595 million, minority interest of $41 million, and adding cash and cash equivalents of $107 million outstanding.
 
(2)   For Median Imputed Value, imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.020 million restricted stock units outstanding.
Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings and Reports, SNL Financial

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is supplemented with the following disclosure:
     The transactions Sandler O’Neill reviewed are as follows:
                                                 
                    Deal Value /
            Deal   LTM            
    Announce   Value   Earnings   Revenue   EBITDA   AUM
Deal   Date   ($mm)   (x)   (x)   (x)   (%)
2007
                                               
Power Corp. of Canada / Putnam LLC
    1/31/2007     $ 3,900     NA     2.8x       12.9x       2.0 %
2006
                                               
Morgan Stanley / FrontPoint Partners LLC
    10/31/2006       400     NA   NA   NA     7.3  
Principal Financial Group / Washington Mutual Advisors
    7/25/2006       740       22.4     NA   NA     2.8  
AMVESCAP Plc / WL Ross & Co LLC
    7/23/2006       375     NA   NA   NA     10.7  
Genworth Financial, Inc. / Assetmark Investment Services, Inc.
    6/29/2006       340     NA   NA   NA     4.3  
Blackrock, Inc. / Merrill Lynch Investment Managers, L.P.
    2/15/2006       9,487       24.0       5.5       12.7       1.8  
2005
                                               
Legg Mason, Inc. / Citi Asset Management Business
    12/1/2005       3,700       15.3       2.7       9.9       0.8  
Sanders Morris Harris Group / Edelman Financial Center Inc.
    5/10/2005       129     NA     7.3       7.6       6.4  
2004
                                               
Blackrock, Inc. / State Street Research Management
    8/26/2004       448     NA     1.6       8.0       0.9  
SunTrust Banks Inc. / Seix Investment Advisors, Inc.
    4/13/2004       300     NA   NA   NA     1.8  
2003
                                               
AMVESCAP Plc / Stein Roe Investment Counsel LLC
    11/20/2003       161     NA   NA   NA     2.2  
Lehman Brothers Holdings Inc. / Neuberger Berman Inc.
    7/21/2003       2,947       26.8       5.1       12.7       5.2  
Goldman Sachs Group Inc. / Ayco Company, L.P.
    4/15/2003       151     NA   NA   NA     2.3  
2002
                                               
Nuveen Investments / NWQ Investment Management Co.
    5/28/2002       141               4.7       10.7       2.0  
2001
                                               
Phoenix Companies Inc. / 60% of Kayne Anderson Rudnick
    11/12/2001       167     NA   NA   NA     3.8  
Legg Mason Inc. / Royce & Associates Inc.
    7/16/2001       215     NA   NA     13.1       4.1  
MA Mutual Life Insurance Co. / Tremont Advisers Inc.
    7/10/2001       145       33.9       5.9     NA     1.8  
Nuveen Investments / Symphony Asset Management
    6/15/2001       210     NA   NA     10.2       4.8  
FleetBoston Financial Corp. / Liberty Financial
    6/1/2001       900     NA   NA     11.5       1.8  
AMVESCAP Plc / National Asset Management Corp.
    2/28/2001       285     NM     7.6     NA     1.7  
2000
                                               
Franklin Resources Inc. / Fiduciary Trust Co. International
    10/25/2000       825       35.8       4.3     NA     1.6  
ABN AMRO / Alleghany Asset Management
    10/18/2000       825     NA   NA     15.1       1.8  
Franklin Resources Inc. / Bisset & Associates
    7/26/2000       97     NA     6.7     NA     2.5  
Alliance Capital / Sandford C. Bernstein
    6/20/2000       3,545     NA   NA     10.5       4.1  
Old Mutual plc/United Asset Management
    6/19/2000       2,229     NA     1.6       7.3       1.1  
Caisse de Depots / Nvest Companies LP
    6/16/2000       2,023     NA   NA     11.8       1.5  
Liberty Financial Cos. / Wanger Asset Management LP
    6/12/2000       450     NA   NA   NA     5.1  
UniCredito Italiano SpA / Pioneer Group Inc.
    5/15/2000       1,270     NM     5.2     NA     5.2  
AMVESCAP / Trimark
    5/9/2000       1,810     NA     4.8       9.2       10.6  
Legg Mason Inc. / Perigee Inc.
    3/10/2000       208       22.4       7.3       12.0       1.5  
Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings, FactSet, SNL Financial
     Sandler O’Neill calculated the following multiples with respect to the comparable transactions:
                                         
    Comparable Transaction Multiples
                            Premium    
    LTM   LTM   LTM   to 30 Day Prior   MRQ
    Revenue   EBITDA   EPS   Market   AUM
     
High
    7.6x       15.1x       35.8x       105.0 %     10.7 %
Low
    1.6x       7.3x       15.3x       11.0 %     0.8 %
Mean
    4.9x       11.0x       25.8x       45.0 %     3.5 %
Median
    5.1x       11.1x       24.0x       24.0 %     2.3 %

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            Aggregate Equity and Per Share Values to Nuveen Investments’ Stockholders based on:
                                    Premium    
            LTM   LTM   LTM   to 30 Day Prior   MRQ
            Revenue (1)(2)   EBITDA (1) (2)   EPS   Market   AUM (1) (2)
             
Per Share
  High   $ 56.79     $ 59.64     $ 84.06     $ 108.69     $ 194.61  
 
  Low   $ 6.97     $ 25.75     $ 35.96     $ 58.85     $ 9.01  
 
  Mean   $ 34.34     $ 41.62     $ 60.62     $ 76.88     $ 58.64  
 
  Median   $ 36.15     $ 42.26     $ 56.40     $ 65.74     $ 36.24  
 
(1)   Equity value derived from Enterprise value by adjusting for debt of $595 million, minority interest of $41 million, and adding cash and cash equivalents of $107 million outstanding.
 
(2)   Imputed per share values based on Nuveen Investments’ fully diluted share count as of June 4, 2007, which includes 79.786 million basic shares outstanding, 15.078 million options outstanding with a weighted average strike price of $28.5009, 0.450 million restricted shares outstanding and 0.022 million restricted stock units outstanding.
Financial data as of March 31, 2007; Market data as of June 15, 2007
Source: Bloomberg, Company Filings and Reports, SNL Financial
6.   The disclosure appearing on pages 50-52 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Opinion of Sandler O’Neill & Partners, L.P.—Discounted Cash Flow of the Company and Terminal Value Analysis” is supplemented with the following information:
     Discounted Cash Flow of the Company and Terminal Value Analysis. Sandler O’Neill performed an analysis that estimated the future streams of cash flow of the Company through December 31, 2010 under various circumstances. The analysis assumed our projected cash flow streams assuming we performed in accordance with the financial projections for 2007 through 2010 as provided by our management. The cash flow streams and terminal values were then discounted to present values using different discount rates ranging from 10.0% to 14.0%. The primary discount rate of 11.8% was chosen by Sandler O’Neill based upon Sandler O’Neill’s calculation of the Company’s cost of equity, which is the sum of the 10-year U.S. Treasury rate on June 15, 2007 plus the product of (i) the equity risk premium derived from data from Ibbotson Associates, which is the additional return an investor expects to receive to compensate for the additional risk associated with investing in equities as opposed to riskless assets and (ii) the Company’s “Risk Beta,” which is a measure of stock price volatility, as derived from certain information as published on Bloomberg. The analysis used the budgeted EBITDA as provided by management of the Company and an assumed range was applied to that budgeted EBITDA of 15% under budget to 15% over budget, using a terminal EBITDA multiple of 13.0x and a discount rate of 11.8% for each respective tabular analysis. As illustrated in the following tables, this analysis indicated an imputed range of values per share for our common stock of $44.16 to $67.69 when applying the terminal EBITDA multiples and discount rates to the matched budget, $39.46 to $74.37 when applying the terminal EBITDA multiples to the -15% to +15% budget range, and $43.09 to $68.84 when applying the discount rates to the -15% to +15% budget range.
7.   The following disclosure appearing on page 53 of the Definitive Proxy Statement in the section entitled “Proposal 1: Adoption of the Merger Agreement—Financial Projections” is supplemented to add our management’s projections with respect to assets under management (new text is underlined):

8


 

                                 
    Fiscal Year End(1)  
    2007E(2)     2008E(2)     2009E(2)     2010E(2)  
Ending AUM   $ 173,800     $ 192,000     $ 212,000     $ 234,000  
 
                       
Revenues
  $ 811     $ 886     $ 975     $ 1,076  
EBIT
  $ 383     $ 417     $ 459     $ 516  
Net Income
  $ 218     $ 240     $ 266     $ 302  
EPS
  $ 2.62     $ 2.86     $ 3.17     $ 3.59  
 
(1)   Financial projections for all fiscal years were provided to the special committee, our board of directors, Goldman Sachs, Sandler O’Neill, Madison Dearborn and potential co-investors with Madison Dearborn.
 
(2)   All numbers in the above chart are in millions, except per share data. In preparing the projections, our management assumed a market appreciation of assets under management of 5% and 0% for equities and fixed income, respectively, in 2007; and 5.5% and 1.5% for equities and fixed income, respectively, in 2008-2010. In addition, structuring or similar fees and support costs which we expect to incur in 2007-2010 in connection with our anticipated launches of closed-end funds and other structured products are not included in these projections.
8.   As of the date of this report, no member of our management has entered into any amendments or modifications to existing employment agreements with us or our subsidiaries in connection with the merger. In addition, as of the date of this report, except as otherwise described in the Definitive Proxy Statement, no member of our management has entered into any agreement, arrangement or understanding with Parent or any of its affiliates regarding employment with, or the right to purchase or participate in the equity plans of, Parent or the surviving corporation.
Additional Information and Where to Find It
     In connection with the proposed transaction, the Company has filed the Definitive Proxy Statement, which has been mailed to its stockholders. The Company’s stockholders are urged to read the Definitive Proxy Statement and any other relevant documents filed with the SEC, as they contain important information about the Company and the proposed transaction. Stockholders may read and copy the Definitive Proxy Statement and any other relevant materials, reports, statements or other information filed by us at the SEC’s public reference room at Station Place, 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of this information by mail from the public reference section of the SEC at Station Place, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our SEC filings made electronically through the SEC’s EDGAR system are available to the public at the SEC’s website located at www.sec.gov. You can also inspect reports, proxy statements and other information about us at the offices of The New York Stock Exchange. For further information on obtaining copies of our public filings at The New York Stock Exchange, you should call (212) 656-3000.

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SIGNATURES
     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
         
    Nuveen Investments, Inc.
 
       
Date: September 4, 2007
  By:   /s/ John L. MacCarthy
 
       
 
  Name:   John L. MacCarthy
 
  Title:   Senior Vice President