Brooks Macdonald Group PLC Acquisition (0305W)
December 20 2013 - 2:00AM
UK Regulatory
TIDMBRK
RNS Number : 0305W
Brooks Macdonald Group PLC
20 December 2013
20 December 2013
BROOKS MACDONALD GROUP PLC
Option Agreement to Acquire Levitas Investment Management
Services
Brooks Macdonald Group plc (the "Group"), the AIM listed
integrated wealth management group, today announces that it has
signed a Put and Call Option Agreement (the "Option Agreement")
with the shareholders of Levitas Investment Management Services
Limited ("Levitas") in respect of the sale and purchase of the
entire issued share capital of Levitas.
Levitas is the sponsor of two funds known as TM Levitas A and TM
Levitas B. Brooks Macdonald Asset Management Ltd ("BMAM") is the
investment adviser to the funds. The funds were launched in July
2012 and aggregate assets under management ("AUM") have increased
to GBP60.52m as at 30 November 2013. The AUM is expected to
increase to c. GBP150m by 30 June 2014 and to c. GBP250m by 30 June
2015.
The Levitas proposition uses a blend of the two funds and a
separate cash fund to match investments to a client's specific risk
rating, thus simplifying the investment and rebalancing processes
while keeping down costs. As a client's risk rating increases, the
Levitas proposition shifts from a low-risk mix of the cash fund and
the more defensive TM Levitas B fund to a more high-risk blend
introducing the more adventurous TM Levitas A fund.
The purchase of Levitas will enable Brooks Macdonald Group to
extend its investment proposition while further enhancing its
ability to meet a range of client attitudes to risk.
The acquisition also complements the Group's growth strategy by
providing a profitable extension to BMAM's existing successful
investment approach and product proposition. The Group expects
Levitas to achieve significant growth over the next five years and
be earnings enhancing in the next financial year.
In the eighteen-month accounting period ending 31 December 2012,
Levitas reported a profit before tax of GBP6,713 on revenues of
GBP52,478.
The Group will incur costs of c. GBP150,000 in the year ending
June 2014 to complete the transaction.
Terms of the Option Agreement and Consideration Structure:
On the terms and subject to the conditions of the Option
Agreement:
1. the shareholders of Levitas have granted to the Group an
option to require the shareholders to sell the entire issued share
capital of Levitas (the "Call Option"); and
2. the Group has granted to the shareholders of Levitas an
option to require the Group to purchase the entire issued share
capital of Levitas (the "Put Option" together with the Call Option,
the "Options").
The consideration payable by the Group, upon exercise of either
of the Options and completion of the Option Agreement, will be
based on 3% of Levitas' AUM calculated at agreed milestones up to
01 November 2018. The maximum consideration payable by the Group
will be GBP24,000,000 (twenty four million pounds), subject to
reduction if the AUM fails to meet the agreed targets. Payment of
the consideration will be made by the Group in a series of
instalments, with the final payment date being on or around 08
November 2020. The consideration is payable by the Group in cash
from its existing resources and future retained earnings.
The Call Option may be exercised by the Group during the period
18 July 2014 - 07 August 2014 and the Put Option may be exercised
by the shareholders of Levitas during the period 08 August 2014 -
28 August 2014. If neither Option is exercised before the expiry of
the relevant Option period, the Options will lapse and the Option
Agreement will terminate.
Craig Knight, a shareholder and director of Levitas, will remain
a director of Levitas post the acquisition, and Derek Miles, also a
shareholder and director of Levitas, will continue to support the
Group on a consultancy basis.
Chris Macdonald, Chief Executive of the Group commented:
"We are very excited about the opportunity of working with
Levitas. We already have the privilege of managing these funds and
we believe that the potential for growth in the future is
significant."
Craig Knight, Director of Levitas commented:
"Having worked with Brooks Macdonald on the launch of our funds,
we are delighted to transition them to Brooks' ownership and are
confident that this development will be in the best interests of
Levitas, our shareholders and the investors in our funds."
Enquiries to:
Brooks Macdonald Group plc
Chris Macdonald, Chief Executive 020 7499 6424
Simon Jackson, Finance Director
Canaccord Genuity
Bruce Garrow /Joe Weaving 020 7523 8350
MHP Communications (on behalf of Brooks Macdonald)
Reg Hoare / Barnaby Fry / Simon Hockridge / Giles Robinson 020 3128 8100
Flagship Consulting (on behalf of Levitas)
Will Brewster 0207 886 8461
This information is provided by RNS
The company news service from the London Stock Exchange
END
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