TIDMARP
RNS Number : 4447V
Ashcourt Rowan PLC
13 December 2013
13 December 2013
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, TO US PERSONS, OR INTO THE UNITED STATES, OR INTO OR
FROM CANADA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE
UNLAWFUL
ASHCOURT ROWAN PLC
("Ashcourt Rowan" or the "Company")
Proposed Acquisition of
UK Wealth Management Limited group of companies ("UKWM")
and
Placing to raise GBP15.3m
Ashcourt Rowan plc (AIM: ARP.L), the UK wealth management group,
is pleased to announce that it has entered into a conditional share
purchase agreement with Duke Street General Partner Limited ("Duke
Street GP Limited") and certain Duke Street LLP funds of which Duke
Street GP Limited is the general partner, to acquire UKWM for up to
GBP14.25 million in cash (the "Acquisition"), alongside an
associated placing of shares. The Acquisition, which is subject to
regulatory approval from the FCA, will create a leading UK wealth
manager with a national footprint offering high quality financial
advice and investment solutions to individuals and corporates
through its network of 17 offices.
Key highlights of the Acquisition:
* Strategic opportunity to combine two complementary
businesses with similar outlooks and ambitions
creating a solid platform for stakeholders in both
businesses
* Enhanced geographic coverage - pro forma group office
network extends to 17 locations across England and
Scotland
* Adds important corporate pensions and benefits
business, a fast growing marketplace
* As at 31 October 2013, UKWM had:
* AUM/I of GBP1.3 billion of which GBP0.3 billion is
discretionary AUM
* Out of UKWM's GBP1.0 billion of FUI, GBP0.4 billion
is on service agreements
* Annualised revenues of GBP8.8 million of which GBP6.6
million were recurring
* Annualised underlying EBITDA at breakeven
* Acquisition to create a group with pro forma AUM/I of
GBP5.0 billion, of which GBP1.9 billion is
discretionary AUM (excluding the AUM relating to the
Generali acquisition)
* Pro forma group revenues* of GBP43.3 million and pro
forma underlying EBITDA** of GBP5.0 million
* Total consideration payable of up to GBP14.25 million
of which GBP12.5 million payable at Completion
(anticipated in Q1 2014)
* Material cost synergies of at least GBP2.25 million
across the combined group expected to be achieved
within six to nine months following completion;
expected implementation costs of c.GBP2 million
* Acquisition is expected to substantially enhance EPS
in its first full year following Completion
Funding:
* Acquisition funded by placing (conditional on
standard conditions including Admission) of 8.25
million shares at 185p, raising approximately GBP15.3
million (before expenses)
* The placing price represents a discount of 2.4 per
cent. to the closing mid-market price of 189.5p per
Ordinary Share as at 12 December 2013 (being the
latest practicable date prior to the date of this
announcement).
* The Placing Shares comprise 23.4% of the enlarged
share capital of the group
Cantor Fitzgerald Europe is acting as sole
financial adviser to the Company in relation
to the Acquisition. Cantor Fitzgerald Europe
and Peel Hunt are acting as joint placing
agents in relation to the Placing.
* includes revenues relating to the Generali
Acquisition
**underlying EBITDA for Ashcourt Rowan as
at 31 March 2013 and identified cost savings
Jonathan Polin, Group CEO of Ashcourt Rowan, said "This is a
transformative deal for Ashcourt Rowan and an important step on our
journey to become a leading UK wealth manager. UKWM's business is
complementary in terms of culture, outlook, client base and office
footprint, adding locations in the North of England where Ashcourt
Rowan was previously under-represented.
"The deal will enhance the service we provide to our clients and
increase the depth of resources we have to offer, with 77 financial
planning and corporate advisers across the enlarged business. In
turn, the additional financial planning resource will support
Ashcourt Rowan's long-term organic growth strategy. Our stated aim
has been to have a separate division for corporate solutions to
support the work we are currently undertaking in auto-enrolment. In
acquiring UKWM we extend our group with specialist individuals who
have the expertise tools and resources to concentrate on the
delivery of solutions to the corporate SME market"
This summary should be read in conjunction with, and is subject
to, the full text of the following announcement. Terms used in this
summary shall have the meaning given to them in the full
announcement.
For further information please contact:
Jonathan Polin, Group CEO Ashcourt Rowan plc
Alfio Tagliabue, Group CFO www.ashcourtrowan.com +44 (0) 20 7871 7373
Rishi Zaveri Cantor Fitzgerald Europe (financial adviser
Catherine Leftley and joint broker) +44 (0) 20 7894 7667
Guy Wiehahn
Harry Florry Peel Hunt LLP (Nominated adviser and joint
Andy Crossley (Corporate Sales/Syndication) broker) +44 (0) 20 7418 8900
Media enquiries:
Emily Morris/Katy Moore Ashcourt Rowan plc +44 (0) 20 7871 7250
Laura Conaghan/Daniel Yea Maitland +44 (0) 20 7379 5151
-ENDS-
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR
INDIRECTLY, TO US PERSONS, OR INTO THE UNITED STATES, OR INTO OR
FROM CANADA OR ANY OTHER JURISDICTION IN WHICH THE SAME WOULD BE
UNLAWFUL
ASHCOURT ROWAN PLC
("Ashcourt Rowan" or the "Company")
Proposed Acquisition of
UK Wealth Management Limited group of companies ("UKWM")
and
Placing to raise GBP15.3m
The acquisition
Ashcourt Rowan plc (AIM: ARP.L), the UK wealth management group,
is pleased to announce that it has entered into a conditional share
purchase agreement with Duke Street General Partner Limited ("Duke
Street GP Limited") and certain funds managed by Duke Street LLP to
acquire the UK Wealth Management group of companies for up to
GBP14.25 million in cash (the "Acquisition"), alongside an
associated placing of shares. The Acquisition, which is subject to
regulatory approval from the FCA, will create a leading UK wealth
manager with a national footprint offering high quality financial
advice and investment solutions to individuals and corporates
through its network of 17 offices. The Acquisition will complete
when the conditional share purchase agreement goes unconditional
which is expected to be in the first quarter of 2014
("Completion").
Information on UKWM
Overview of UKWM
With roots tracing back over 25 years, UKWM is a financial
services group offering best in class independent financial
planning, wealth management and employee benefits to personal,
corporate and trustee clients. UKWM operates out of 5 offices in
Leeds (HQ), Macclesfield, Pontefract, Rugby and York.
Financial Information
As at 31 October 2013, UKWM had approximately GBP1.3 billion of
total Assets under Management and Influence ("AUM/I") of which
GBP0.3 billion were discretionary Assets Under Management ("AUM")
and GBP1.0 billion of Funds Under Influence ("FUI"). Out of UKWM's
GBP1.0 billion of FUI, approximately GBP0.4 billion are contracted
on client service agreements. As at 31 October 2013, UKWM had
annualised revenues of GBP8.8 million (of which GBP6.6 million were
recurring) and, on an annualised basis, had breakeven underlying
EBITDA. As at 30 September 2013, UKWM had net tangible assets of
GBP1.9 million including GBP0.95 million of cash.
UKWM divisional breakdown (annualised basis(1)
)
--------------------------------------------------------------------
Financial Investment Corporate Pensions
Planning Management Solutions Administration
----------- ---------- ------------ ----------- ----------------
AUM/FUI GBP1.0 GBP0.3 - -
billion billion
----------- ---------- ------------ ----------- ----------------
Revenue GBP4.9 GBP1.7 GBP1.8 GBP0.3
million million million million
----------- ---------- ------------ ----------- ----------------
Recurring GBP3.4 GBP1.7 GBP1.2 GBP0.3
Revenue million million million million
----------- ---------- ------------ ----------- ----------------
Underlying GBP0.0 million
EBITDA
----------- -------------------------------------------------------
Source: UKWM finance report October 2013 and other internal
management accounts provided by UKWM
(1) Based on 10 months to 31 October 2013 annualised
Benefits of the acquisition
The acquisition adds greater scale in financial planning and
wealth management and enhances the Company's geographic coverage.
It also adds an established corporate business. On a pro-forma
basis the enlarged group revenues will be GBP43.3m (including the
acquisition of Generali Portfolio Management (UK) Limited
("Generali") due to complete in January 2014 and expected to
deliver GBP1.9m of annual revenues) and underlying EBITDA will be
GBP5.0m after taking into account anticipated synergies.
The Company expects to achieve material cost synergies across
the combined group of at least GBP2.25 million within six to nine
months following completion primarily through the integration of
the support structure and platform. The Company anticipates it will
need to incur approximately GBP2m of implementation costs to
achieve these synergies.
The table below illustrates how the pro-forma figures have been
calculated:
Ashcourt UKWM Expected Pro-forma(2)
Rowan synergies
---------- --------- ----------- ----------- -------------
31 March Annualised
2013
---------- --------- ----------- ----------- -------------
AUI / FUI GBP3.7 GBP1.3 GBP5.0
billion billion billion
---------- --------- ----------- ----------- -------------
Revenue GBP32.6 GBP8.8 GBP41.4
million million million
---------- --------- ----------- ----------- -------------
EBITDA GBP2.8 GBP0.0 GBP2.25 GBP5.0
million million million million
---------- --------- ----------- ----------- -------------
(2) Excludes acquisition of Generali
The Acquisition is expected to be substantially EPS enhancing in
the first full year following Completion (excluding implementation
costs) and is expected to complete in the first quarter of
2014.
Sale and purchase agreement
Completion of the Acquisition under the sale and purchase
agreement is conditional upon a limited number of matters.
Principally these are the approval of the FCA and there being no
material breach of regulation in relation to UKWM.
The deferred consideration of GBP1.75 million is payable in cash
fifteen months after completion if recurring revenue is above a
pre-determined level for the twelve months following Completion. If
the Company were to fail to complete the Acquisition due to any
failure in the funding it would be obliged to make a pre-determined
payment to the sellers.
Placing and Admission
In order to fund the Acquisition, on behalf of the Company,
Cantor Fitzgerald Europe ("Cantor Fitzgerald") and Peel Hunt LLP
("Peel Hunt") (and together the "Placing Agents") have
conditionally raised approximately GBP15.3 million (with combined
placing and transaction costs of c. 6%) pursuant to a placing of
8.25 million shares (the "Placing Shares") at a price of 185p per
share (the "Placing"). The placing price represents a discount of
2.4 per cent. to the closing mid-market price of 189.5 pence per
Ordinary Share as at 12 December 2013 (being the latest practicable
date prior to the date of this announcement).
The Placing will be affected using a cash box structure, using
the Company's existing authorities to issue shares. The Placing
Shares equate to approximately 23.4% of the enlarged issued share
capital of the Company. The Placing is conditional on Admission (as
defined below) becoming effective and the placing agreement between
the Company and the Placing Agents (the "Placing Agreement")
becoming unconditional in all respects. The Placing is not
conditional upon completion of the Acquisition. Following
Admission, the Placing Shares will rank pari passu in all respects
with the existing ordinary shares in issue.
The Placing has been undertaken pursuant to the terms and
conditions of the Placing Agreement and is not being underwritten.
The Placing Agreement contains customary conditions, warranties and
termination rights in favour of Cantor Fitzgerald and Peel
Hunt.
Application will be made for the Placing Shares to be admitted
to trading on the AIM Market of the London Stock Exchange
("Admission"). Admission is expected to take place on 18 December
2013. Following Admission the Company's enlarged issued share
capital will comprise 35,279,330 Ordinary Shares with voting
rights. The figure of 35,279,330 Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations
by which they will determine if they are required to notify their
interest in, or a change in their interest in, the share capital of
the Company under the FCA's Disclosure and Transparency Rules.
Interim results
The Company has today released its interim results.
ENDS
For further information please contact:
Jonathan Polin, Group CEO Ashcourt Rowan plc
Alfio Tagliabue, Group CFO www.ashcourtrowan.com +44 (0) 20 7871 7373
Rishi Zaveri Cantor Fitzgerald Europe (financial adviser
Catherine Leftley and joint broker) +44 (0) 20 7894 7667
Guy Wiehahn
Harry Florry Peel Hunt LLP (Nominated adviser and joint
Andy Crossley (Corporate Sales/Syndication) broker) +44 (0) 20 7418 8900
Media enquiries:
Emily Morris/Katy Moore Ashcourt Rowan plc +44 (0) 20 7871 7250
Laura Conaghan/Daniel Yea Maitland +44 (0) 20 7379 5151
Notes:
This announcement contains a number of forward-looking
statements relating to Ashcourt Rowan with respect to, amongst
other things, financial condition; results of operations; economic
conditions in which the Company operates and in which the Company
will operate; the business of the Company; future benefits of the
Acquisition and the Company's management plans and objectives. The
Company considers any statements that are not historical facts as
"forward-looking statements". They relate to events and trends that
are subject to risks and uncertainties that could cause the actual
results and financial position of either the Company to differ
materially from the information presented in the relevant
forward-looking statement. The pro-forma information provided is
inherently limited due to the subjective nature of the calculation.
When used in this announcement the words "estimate", "intend",
"believe", "expect", "should" and similar expressions, as they
relate to the Company's management, are intended to identify such
forward-looking statements. Readers are cautioned not to place
undue reliance on these forward-looking statements which speak only
as at the date of this announcement. Neither the Company, nor any
member of its group, its Directors, Cantor Fitzgerald Europe (its
financial adviser and joint-broker) or Peel Hunt LLP (its NOMAD and
joint-broker), undertake any obligation publicly to update or
revise any of the forward-looking statements contained in this
announcement.
This announcement is for information purposes only and does not
constitute an offer or invitation to acquire or dispose of any
securities or investment advice in any jurisdiction.
Cantor Fitzgerald Europe, which is authorised and regulated in
the United Kingdom by the Financial Conduct Authority, is acting as
financial adviser exclusively for the Company in connection with
the Acquisition and joint placing agent in connection with the
Placing.
Peel Hunt LLP, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting as joint
placing agent for the Company in connection with the Placing.
No representation or warranty, express or implied, is made by
Cantor Fitzgerald Europe, Peel Hunt LLP or any of their respective
directors, officers, employees, advisers or agents as to any of the
contents of this announcement and, without limiting the statutory
rights (if any) of any person to whom this announcement is issued,
no liability whatsoever is accepted by Cantor Fitzgerald Europe,
Peel Hunt LLP or any of their respective directors, officers,
employees, advisers or agents for the accuracy of any information
or opinions contained in this announcement or for the omission of
any material information.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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