(Alliance News) - Brooks Macdonald Group PLC on Friday said it has successfully completed the GBP30 million placing needed to fund its Cornelian Asset Managers Group Ltd acquisition.
Brooks Macdonald placed 1.7 million shares at 1,775 pence each via an accelerated bookbuild, with Peel Hunt LLP acting as sole bookrunner. The placing raised around GBP30 million, which will help fund its Cornelian buy, and represents around 12% of the company's issued share capital before the placing.
Shares in London-headquartered investment management services firm Brooks Macdonald were down 3.0% at 1,770.00p in London on Friday afternoon.
Following admission of the placing shares, Brooks Macdonald will have 15.7 million shares in issue.
"We are pleased by the support and interest shown in the placing and we are committed to delivering sustainable value enhancing growth for all shareholders," said Brooks Macdonald Chief Executive Caroline Connellan.
Brooks is to pay up to GBP39 million net for Edinburgh-based wealth and asset manager Cornelian. The initial consideration is GBP31 million, of which GBP9 million will be paid in Brooks Macdonald shares and the other GBP22 million in cash.
Should Cornelian meet performance targets - relating to client asset retention and growth, as well as the realisation of cost synergies - a further GBP8 million in cash will be payable.
Cornelian's financial figures for the financial year ended September 30 show funds under management of around GBP1.4 billion with growth in FuM of around GBP750 million since 2014. Its revenue for the recent year was approximately GBP10.3 million and its earnings before interest, tax, depreciation, and amortisation totalled around GBP3.4 million.
As a result of the buy, Brook Macdonald expects its pro forma funds under management to increase by roughly 10% to GBP14.7 billion with annual cost synergies estimated to be GBP3.8 million by the end of the first full year after completion of the deal.
The purchases is expected to be accretive to earnings per share in the 12 months ending June 2020, with accretion set to rise to around 9% in the year ending June 2021.
Chief Executive Caroline Connellan said: "From the outset of our discussions with Cornelian, we have been struck by the complementary cultures, investment processes and business models of the two firms, with both having a strong focus on clients and intermediaries. We are delighted that we have been able to agree a transaction that brings additional multi-asset capability and distribution strength into the group.
"The transaction creates value for our shareholders and crucially will provide benefits for both firms' clients and the intermediaries with whom we work. The acquisition of Cornelian is a significant step forward in our medium-term strategy of delivering sustainable, value-enhancing growth."
Separately, Books Macdonald said Chief Investment Officer Richard Spencer and his close associates Fiona Spencer and Nick Spencer had sold a combined 50,000 shares at GBP17.75 each for a total of GBP887,500.
By Anna Farley; annafarley@alliancenews.com
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Brooks Macdonald (BRK)