TIDMFSG
RNS Number : 5610O
Foresight Group Holdings Limited
13 June 2022
LEI: 213800NNT42FFIZB1T09
13 June 2022
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Foresight acquires Downing's ventures businesses
Acquisition will create a leading ventures proposition and drive
Foresight's private equity AUM to GBP1.2 billion
Foresight Group Holdings Limited ("Foresight", "Foresight Group"
or the "Group"), a leading infrastructure and private equity
manager, is pleased to announce the acquisition ("Acquisition") of
the technology ventures division of Downing LLP ("Downing"),
including the management of Downing's venture capital trusts[1]
("VCTs") and the Downing's Ventures Enterprise Investment Scheme
("EIS"). Foresight will pay an initial consideration of
c.GBP13.6[2] million, with a further consideration of up to GBP4.2
million payable over a three-year period subject to the achievement
of certain criteria, and an additional capped fee sharing
arrangement in respect of future performance and other fees. The
Acquisition will be funded from existing financial resources.
Through this transaction, Foresight is acquiring the investment
mandates of Downing ONE VCT Plc, Downing FOUR VCT Plc(1) and
Downing Ventures EIS Scheme, representing a combined AUM of
c.GBP275(2) million deployed across venture capital, AIM-quoted
investee companies and a small number of legacy asset-backed debt
investments. These venture-focused funds, with c.12,000 investors
and assets predominantly across the UK as well as in the US and
Israel, are complementary to the existing funds managed by
Foresight's private equity team.
The combined offering will increase Foresight's VCT NAV to
GBP542 million and, alongside fundraising and movements in
investment valuations, will boost private equity AUM to GBP1.2
billion, up c.30% from 31 March AUM of GBP930 million. The
Acquisition is expected to be earnings enhancing, with an
anticipated core EBITDA pre-SBP of c.GBP2.8 million (annualised) in
the first 12 months post completion, excluding exceptional deal
costs.
With a thematic focus on enterprise software, deep technology
and consumer, the Acquisition will diversify Foresight's existing
ventures offering and complement the Foresight Williams Technology
hard tech and industrial software focus. Additionally, as the
Downing venture capital trusts hold shares in AIM-listed companies,
the acquired portfolio provides Foresight's award-winning private
equity team with a platform to potentially expand into a new asset
class. This broader client offering, when combined with Foresight's
regional footprint and strong retail sales platform is anticipated
to provide enhanced growth opportunities.
This first acquisition following Foresight's IPO last year
delivers a meaningful contribution to the Group's growth profile
and provides further evidence of Foresight delivering on its stated
strategy; to grow AUM by 20-25% per annum over the medium term, to
maintain the contribution from recurring revenues within the 85-90%
range, and to grow core EBITDA margin to 43% over the medium term.
Foresight and its management team have a proven, successful track
record of acquiring the investment mandates of mature funds and
portfolios from third parties, including the Advent VCT portfolios,
and more recently the JLEN and PiP funds.
The Acquisition is anticipated to complete by the end of June
2022. Foresight Group continues to actively engage in strategically
compelling M&A opportunities that align with its core
competencies.
Bernard Fairman, Executive Chairman of Foresight Group Holdings
Limited, commented:
"The VCT and EIS businesses which we are acquiring are an
excellent strategic fit for Foresight, complementing our existing
portfolio and adding scale. We are investing in multi-stage, fast
growing, scalable businesses with the potential to generate
significant returns. The additional capabilities will deepen our
retail investor offering and provide further opportunities for our
extensive retail sales team to drive growth.
We said at the time of our IPO that M&A would be a core part
of our growth strategy and I am delighted that we are successfully
delivering on that promise. This transaction represents a
significant strategic step, taking Group AUM to over GBP9 billion
and private equity AUM to GBP1.2 billion today, while also
providing us with a broader set of funds and capabilities.
We continue to actively pursue multiple further M&A
opportunities across the wider business, alongside delivering
strong organic growth."
For further information please contact:
Foresight Group Investors Citigate Dewe Rogerson
Caroline Merrell / Toby
Liz Scorer Moore
+44 (0) 7852 210329
/ +44 (0) 7768 981763
+44 (0) 7966 966956 caroline.merrell@citigatedewerogerson.com
ir@foresightgroup.eu /
toby.moore@citigatedewerogerson.com
About Foresight Group Holdings Limited
Foresight Group was founded in 1984 and is a leading listed
infrastructure and private equity investment manager. With a
long-established focus on ESG and sustainability-led strategies, it
aims to provide attractive returns to its institutional and private
investors from hard-to-access private markets. Foresight manages
over 300 infrastructure assets with a focus on solar and onshore
wind assets, bioenergy and waste, as well as renewable energy
enabling projects, energy efficiency management solutions, social
and core infrastructure projects and sustainable forestry assets.
Its private equity team manages eight regionally focused investment
funds across the UK and a SME impact fund supporting Irish SMEs.
This team reviews close to 2,500 business plans each year and
currently supports more than 130 SMEs. Foresight Capital Management
manages four strategies across six investment vehicles with an AUM
of over GBP1.6 billion.
Foresight operates from 12 offices across six countries in
Europe and Australia. Foresight Group Holdings Limited listed on
the Main Market of the London Stock Exchange in February 2021.
https://www.fsg-investors.com/
Disclaimer - Forward-looking statements
This statement, prepared by Foresight Group Holdings Limited
(the "Company"), may contain forward-looking statements about the
Company and its subsidiaries (the "Group"). Such forward-looking
statements can be identified by the use of forward-looking
terminology, including the terms "believes", "projects",
"estimates", "plans", "anticipates", "targets", "aims",
"continues", "expects", "intends", "hopes", "may", "will", "would",
"could" or "should" or, in each case, their negative or other
various or comparable terminology. Forward-looking statements
involve known and unknown risks, uncertainties, assumptions and
other factors which are beyond the Company's control and are based
on the Company's beliefs and expectations about future events as of
the date the statements are made. If the assumptions on which the
Group bases its forward-looking statements change, actual results
may differ from those expressed in such statements. There are a
number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these
forward-looking statements, including those set out under
"Principal Risks" in the Company's annual report for the financial
year ended 31 March 2021. The annual report can be found on the
Company's website ( www.fsg-investors.com ). Forward-looking
statements speak only as of the date they are made. Except as
required by applicable law and regulation, the Company undertakes
no obligation to update these forward-looking statements. Nothing
in this statement should be construed as a profit forecast.
[1] Excluding the Healthcare share class
[2] Subject to final marked to market adjustments on the AUM of
the AIM portfolio
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