The Magellan Financial Group Ltd (ASX: MFG) share price will be one to watch today after the Aussie investment group announced its latest acquisition.
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What did Magellan announce this morning?
The listed investment company (LIC) announced that it is wading into the global fast food industry. Magellan has entered into an agreement to acquire a 10% stake in Guzman y Gomez (Holdings) Limited (GYG).
GYG is a well-known, Australian-based quick service restaurant chain with a focus on Mexican cuisine. The group currently has 147 restaurants spanning Australia, Singapore, Japan and the United States.
The 10% shareholding is set to cost Magellan $86.8 million in cash, with completion conditional on GYG shareholder approval in late January 2021. The announcement makes the Magellan share price worth watching in early trade on Tuesday.
The acquisition will fall under Magellan's Principal Investments business. Magellan will hold a non-executive director position but have no active day-to-day role in GYG.
Magellan Chairman Hamish Douglass said the investment company is "extremely pleased" to be come a GYG shareholder. The group will look to leverage its "deep investment experience" in the quick service restaurant industry as a major investor and supportive shareholder.
How has the Magellan share price performed this year?
There's no doubt the coronavirus pandemic and subsequent response has wreaked havoc on markets this year. The S&P/ASX 200 Index (ASX: XJO) has edged 0.3% lower to 6,669.9 points this year while the Magellan share price has also struggled.
Shares in the Aussie LIC are down 4.4% since the start of January to $55.18 per share. Magellan currently has a market capitalisation of $10.1 billion and is trading near the middle of its 52-week range.
Magellan shares are yielding 3.9% per annum right now with a price-to-earnings (P/E) ratio of 25.3.
Foolish takeaway
It will be interesting to see how the the Magellan share price performs today as investors digest news of the group's latest acquisition.
