REG - Brooks Macdonald Grp - Sale of Brooks Macdonald International

Brooks MacdonaldAnnouncement

12/09/2024 07:15

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RNS Number : 9234D  Brooks Macdonald Group PLC  12 September 2024

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Brooks Macdonald Group plc

For immediate release

12 September 2024

 

Brooks Macdonald Group plc

Sale of Brooks Macdonald International

to Canaccord Genuity Wealth Management Limited

Brooks Macdonald Group plc ("Brooks Macdonald", the "Group" or the "Company")
is pleased to announce that it has entered into a binding agreement with
Canaccord Genuity Wealth (International) Holdings Limited ("Canaccord") to
sell its wholly owned subsidiary, Brooks Macdonald Asset Management
(International) Limited and its subsidiaries ("BMI"), for a total
consideration of up to £50.85 million, including an initial consideration of
£28 million payable in cash upon completion (the "Disposal"). Completion is
expected by March 2025 subject to regulatory approvals.

The Disposal concludes the previously announced strategic review of the
Group's international operations (the "Strategic Review").

Transaction highlights & key terms

·      Initial consideration of £28 million, payable in cash on
completion.

·      Contingent consideration of up to £22.85 million, payable in
cash two years post-completion. The contingent consideration will be dependent
on the revenue performance of the BMI business.

·     The proceeds of the Disposal will allow for focused investment in
the Group's core proposition and will enhance its ability to capitalise on the
structural opportunities in the UK, to grow organically and through targeted
M&A.

·     As of 30 June 2024, BMI had £2.3 billion of Funds under
Management ("FUM"). In the financial year 2024, BMI delivered revenue of
£19.9 million and £3.3 million of underlying profit before tax(1).

Background and rationale for the Disposal

On 7 March 2024, the Group announced it had commenced the Strategic Review.
Various options for BMI have been considered as part of this review.

The Board has now concluded that the sale of BMI is in the best interests of
the Group as it simplifies the Group's operations to focus on its core
activities of high-quality investment management and financial planning within
the UK. The proceeds of the Disposal will allow for focused investment in the
Group's core proposition and will enhance its ability to capitalise on the
structural opportunities in the UK, to grow organically and through targeted
M&A.

In reaching an agreement with Canaccord, the Board has achieved an attractive
result for the Company and its shareholders. The transaction also secures a
highly credible future owner for BMI with a strong presence in the Crown
Dependencies. The Group will work with Canaccord to ensure a smooth transition
for existing BMI clients.

BMI will be acquired by Canaccord with an agreed level of regulatory capital,
with any surplus paid for at completion.

The Group will incur £3-5m separation and transitional arrangement costs
which will be treated as exceptional items in the current and the following
financial year.

 

Andrea Montague, CEO Designate & Chief Financial Officer of Brooks
Macdonald, commented:

"We are pleased to announce the sale of BMI to Canaccord as their presence and
understanding of the local markets will provide a strong foundation for the
future growth and development of the business. I would like to thank all our
BMI colleagues for their commitment to their clients and professionalism. We
wish them all the best for the future."

 

David Esfandi, Chief Executive Officer of Canaccord Genuity Wealth Management,
commented:

 "Brooks Macdonald International is a quality business and an excellent
strategic fit for our international division. This is a mutually beneficial
transaction that will cement Canaccord's position as a fully-fledged
integrated wealth manager. Both firms are well-established across the Crown
Dependencies, and BMI will also add significant financial planning expertise
in our international business. Canaccord has a robust and scalable operating
platform with a proven track record of successfully integrating businesses,
and we anticipate a smooth process for BMI in 2025."

 

 

Brooks Macdonald is being advised by Raymond James Financial International
Limited, and Travers Smith LLP as legal adviser, in relation to the sale of
BMI.

 

Enquiries:

 Brooks Macdonald Group plc                                     via Raymond James

 Andrea Montague, CEO Designate & Chief Financial Officer

 Alick Mackay, Strategy & Corporate Development Director

 Raymond James (Financial Adviser to the Company)               +44 (0) 20 3798 5700

 Edward Griffin / Jack Wills

 Singer Capital Markets Advisory LLP                            +44 (0) 20 7496 3000

 (Nominated Adviser and Joint Broker)

 Charles Leigh-Pemberton / James Moat

 Investec Bank plc (Joint Broker)                               +44 (0) 20 7597 4000

 Chris Baird / David Anderson

 FTI (Media Enquiries)                                          Brooksmacdonald@fticonsulting.com (mailto:Brooksmacdonald@fticonsulting.com)

 Edward Berry / Katherine Bell                                  07703 330199 / 07976 870961

 

About Brooks Macdonald

Brooks Macdonald Group plc, through its various subsidiaries, provides leading
wealth management services in the UK and internationally. The Group, which was
founded in 1991 and began trading on AIM in 2005, had discretionary FUM of
£18.0 billion as of 30 June 2024.

Brooks Macdonald offers outsourced discretionary investment management for
intermediaries and advice-led integrated wealth management for private
clients. The Group also acts as fund manager to a range of onshore and
international funds.

The Group has a strong local presence across the UK.

 

About BMI

BMI provides its services to international clients and intermediaries through
its Crown Dependencies based investment management, financial planning, and
fund management subsidiaries, Brooks Macdonald Asset Management
(International) Limited and Brooks Macdonald International Fund Managers
Limited. BMI has offices in Jersey, Guernsey and the Isle of Man with the
majority of its 57 employees located in the Jersey office.

As of 30 June 2024, BMI had £2.3 billion of FUM with annual revenue of £19.9
million and £3.3 million of underlying profit before tax 1 . This is after
accounting for £4.3 million of central cost recharges from Group functions
which will not transfer as part of the Disposal. BMI had net assets of £29.8m
as of 30 June 2024.

 

Cautionary statements

This Announcement may contain, and the Company may make verbal statements
containing "forward‑looking statements" with respect to certain of the
Company's plans and its current goals and expectations relating to its future
financial condition, performance, strategic initiatives, objectives, and
results. Forward‑looking statements sometimes use words such as "aim",
"anticipate", "target", "expect", "estimate", "intend", "plan", "goal",
"believe", "seek", "may", "could", "outlook" or other words of similar
meaning. By their nature, all forward‑looking statements involve risk and
uncertainty because they relate to future events and circumstances which are
beyond the control of the Company. As a result, the actual future financial
condition, performance, and results of the Company may differ materially from
the plans, goals and expectations set forth in any forward‑looking
statements. Any forward‑looking statements made in this Announcement by or
on behalf of the Company speak only as of the date they are made.

The information contained in this Announcement is subject to change without
notice and except as required by applicable law or regulation (including to
meet the requirements of the AIM Rules, MAR, the Prospectus Rules and/or
FSMA), the Company expressly disclaims any obligation or undertaking to
publish any updates or revisions to any forward‑looking statements contained
in this Announcement to reflect any changes in the Company's expectations with
regard thereto or any changes in events, conditions or circumstances on which
any such statements are based. Statements contained in this Announcement
regarding past trends or activities should not be taken as representation that
such trends or activities will continue in the future. You should not place
undue reliance on forward‑looking statements, which speak only as of the
date of this Announcement.

No statement in this Announcement is intended to be a profit forecast and no
statement in this Announcement should be interpreted to mean that earnings per
share of the Company for the current or future years would necessarily match
or exceed the historical published earnings per share of the Company.

(#_ftnref1) 1] BMI's underlying PBT represents a statutory loss before tax of
£0.3m for the year ended 30 June 2024 at the consolidated Group level,
excluding amortisation of client relationships, organisational restructure
costs, and consolidation adjustments

 

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