Kansas City Southern Industries Inc. got the go-ahead Monday from the Internal Revenue Service to do a long-awaited spinoff of its financial services companies that could value the companies at $8 billion.
Kansas City Southern plans to spin off all these companies, which include the top-performing Janus Funds group, into one entity, called Stilwell Financial Inc. Kansas City Southern said it expects to list Stilwell on the New York Stock Exchange at about the time of the spinoff, under the symbol SV.
Janus manages $162 billion in assets, up from $60 billion two years ago. Given that "5% of assets under management is becoming the going rate" for valuing a mutual fund company, said Ben Phillips, an industry consultant at Cerulli Associates Inc. in Boston, Janus could be worth $7 billion to $8 billion.
The other companies in the unit are mutual fund manager Berger Associates, with about $4 billion in assets; DST Systems, a firm that does back-office work for mutual funds; and Nelson's Money Managers, a British pension fund management group.
Kansas City Southern expects to proceed with the spinoff in the fourth quarter of this year.
The spinoff was originally scheduled to take place late last year, but the move was postponed when the IRS voiced concerns. Kansas City Southern required approval from the IRS to avoid paying hefty taxes.
Shares of the Kansas City, Mo.-based firm rose $1.75 to close at $64 on the NYSE.