Janus Capital Group Inc. (NYSE: JNS) shares saw a handy gain in Monday’s session after it was announced that Janus had agreed to a merger of equals with Henderson Group. After the stock finally settled down from Monday’s move, analysts are starting to weigh in on the company.

Under the terms of the agreement, the merger will take place through a share exchange, with each share of Janus exchanged for 4.719 newly issued shares in Henderson. After the exchange, Henderson shareholders are expected to own roughly 57%, while Janus shareholders will own the remaining 43% of the newly combined company.

The transaction is expected to close in the second quarter of 2017.

Jefferies actually downgraded Janus to a Hold rating from Buy, while maintaining its price target of $16, seemingly accommodating for Monday’s 12% move. While the firm views the proposed transaction positively from a strategic sense, growth for the combined entity will remain difficult given current industry trends.

The announced formation of Janus Henderson Global Investors will create a proforma $322 billion assets under management global entity with enhanced scale and distribution. The deal will drive an estimated $110 million in cost synergies starting in mid-2017, which are forecast to be fully realized within three years (at least 50% of which management is forecasting to occur within the initial 12 months post close). In addition to organic growth, management guidance also highlights the merger will drive double-digit accretion to both companies’ earnings.

Jefferies went on to say in its report:

Mgmt. highlighted “ambition to deliver 2 to 3 percentage points” of additional organic growth following the integration. We acknowledge INTECH will likely benefit from increased European exposure (and potentially Bill Gross) as well as the opportunity to increase Henderson’s exposure to Japanese investors; however, the broader challenges of the DOL in the US and the implications of Brexit and Mifid II in Europe remain. While global scale and increased product diversity are positives, investment performance and overall industry challenges for active mgmnt. remain the primary headwinds to organic growth.

Shares of Janus were last seen down 3.7% at $15.12 on Tuesday, with a consensus analyst price target of $15.19 and a 52-week trading range of $11.07 to $16.62.

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