(Alliance News) - Equiniti Group PLC on Monday said it has agreed to sell the EQi direct-to-consumer business of Equiniti Financial Services to interactive investor for GBP48.5 million.
Equiniti said the sale of the business to ii, already one of the largest share trading platforms in the UK, is expected be completed by the summer. It will receive GBP47.5 million in cash on completion and up to a further GBP1.0 million contingent on the timing of migrating customers onto the ii platform.
Equiniti said it will use the money to reduce debt, with interest costs expected to be reduce by GBP400,000 as a result. It will book a GBP13.0 million accounting profit on the deal and pay GBP2.1 million in corporation tax. It said the disposal takes total proceeds from the recent divestment of non-core assets to GBP63.8 million.
"This sale demonstrates further progress in focusing our activities and strengthening the group's balance sheet, reducing our leverage," said Equiniti Chief Executive Cheryl Millington.
The EQi business had assets under administration of GBP5.3 billion on December 31. In 2020, it recorded earnings before interest, tax, depreciation and amortisation of GBP3.3 million on GBP14.5 million in revenue.
"This marks another important milestone in the ii story, having brought together five established investment businesses within the last four years to create a single market-leading platform that offers the retail investor real choice and value," said ii Chief Executive Richard Wilson.
Manchester-based ii bought the Share Centre last year and in 2017 purchased TD Bank Group's UK direct investing business, creating the second largest online investment broker behind FTSE 100-listed Hargreaves Lansdown.
Equiniti shares were down 0.7% at 143.60 pence early Monday in London.
By Tom Waite; thomaslwaite@alliancenews.com
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Hargreaves Lansdown (HL.)