7 Dec 2020 07:22
7 December 2020
Sanne Group plc
(Sanne or the Group)
Acquisition and trading update
Sanne, the global provider of alternative asset and corporate services, today announces the accretive acquisition of Private Equity Administrators Group ("PEA").
In addition, the Group expects to deliver underlying EPS for the year ending 31 December 2020 in-line with expectations, despite the market backdrop remaining uncertain.
Acquisition and M&A Opportunity
Sanne is pleased to announce that it has entered into an agreement to acquire PEA, a leading Scandinavian and Guernsey private equity fund administrator, from its founders who will stay with Sanne. It adds over 55 employees and over €27bn of assets under administration to Sanne, with offices in Denmark, Sweden and Guernsey. Both Sanne and PEA have a close cultural alignment sharing a strong focus on delivering high quality client service.
PEA is a strategically important acquisition that will further expand Sanne's geographical footprint introducing a new physical presence in the important Scandinavian markets of Denmark and Sweden, which have strong underlying growth characteristics. The acquisition will also provide an opportunity to increase the scale of the Group's Guernsey operations and client base.
The acquisition has been agreed with an upfront consideration of €27m, of which 30 per cent will be payable in Sanne shares, and cash earn-out components based on performance up to the end of 2022, capped at €3.25m. PEA is expected to deliver revenues of c.€6.7m and EBITDA of c.€2.1m for the year to 31 December 2020. For the year to 31 December 2019 the business had profits before tax of €1.5m and gross assets of €2.7m. The acquisition should complete by the end of Q1 2021, subject to regulatory clearance. The transaction is expected to be immediately earnings enhancing.
This is the fourth acquisition that Sanne has announced this year with the Group continuing to work actively on a healthy pipeline of potential transactions. The Group remains disciplined in its approach to acquisitions, focusing on executing transactions that are accretive to the Group's long-term strategic vision and to value.
Trading Update
Sanne has continued to trade resiliently through the second half of the year and expects to deliver underlying EPS in-line with expectations. The Group has also begun to see increased client activity converting into new business wins during Q4.
The market backdrop has continued to be impacted by the on-going COVID-19 pandemic, as well as additional uncertainty relating to the US elections and Brexit negotiations. Accordingly, the delays to fundraisings and closings as well as the reduced transaction levels, seen throughout Q2, continued in Q3. Although existing client activity has latterly begun to increase in Q4, full year revenues are consequently expected to be marginally below the Board's previous expectations.
Despite the delay to fundraising and closings, we again expect to deliver a robust new business performance with new wins anticipated to be similar to the first half, which had benefited from a largely unaffected market through Q1. This result will provide good growth momentum for 2021 and beyond.
The medium and long-term structural growth drivers for the industry remain strong and we expect market conditions to improve over time now that several effective COVID-19 vaccines will be made available. While the timing of this improvement remains difficult to assess, the continued investment in our client proposition, technology-led services and operational platform will ensure that Sanne is well-positioned to capture the growth opportunities as the market recovers.
The Group continued to exercise rigorous cost control and operational discipline during the year and as a result expects underlying operating margins within its guided range. The business also continues to benefit from high levels of cash conversion.
Notice of 2020 Results
The Group expects to announce its full year results for the year to 31 December 2020 on Friday 19 March 2021.
Enquiries:
Tulchan Communications LLP +44 (0) 20 7353 4200
Tom Murray
Harry Cameron
Sanne Group plc +44 (0) 20 3327 9720
Martin Schnaier, Chief Executive Officer
James Ireland, Chief Financial Officer
Notes
Sanne is a leading global provider of outsourced alternative asset and corporate business services. Established for over 30 years and listed as a FTSE 250 company on the Main Market of the London Stock Exchange, Sanne employs around 1,800 people worldwide and administers structures and funds that have in excess of £250 billion of assets.
Key clients include leading alternative asset managers, global financial institutions, family offices and international corporates.
Sanne operates from a global network of offices located in leading financial jurisdictions, which are spread across the Americas, Europe, Africa and Asia-Pacific.
This announcement may contain forward-looking statements. 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 speak only as of the date they are made and the Company does not assume or undertake any obligation or responsibility to update any of the forward-looking statements contained in this announcement, whether as a result of new information, future events or otherwise, except to the extent legally required.
sannegroup.com
LEI Code: 2138005UBLKEZRITH576