TIDMALGW
RNS Number : 6971O
Alpha Growth PLC
11 February 2021
The information communicated within this announcement is deemed
to constitute inside information as stipulated under the Market
Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic
law by virtue of the European Union (Withdrawal) Act 2018 (as
amended). Upon the publication of this announcement, this inside
information is now considered to be in the public domain.
Alpha Growth plc
(" Alpha " or the "Company")
Strategic Acquisition and Company Update
Alpha Growth Plc (LSE: ALGW and OTCQB: ALPGF), a leading
financial services specialist in the growing longevity asset class,
is pleased to announce the signing of a share purchase agreement to
acquire a Bermuda based holding company and its wholly owned
insurance company.
This is a transformative deal for Alpha Growth and represents a
significant building block in the company's continued evolution,
the deal adds substantial assets under management to the group and
is earnings accretive. Following the completion of the acquisition,
it is expected that Alpha Growth will be EBITDA positive.
To support the acquisition, Pello Capital has successfully
completed an oversubscribed placing of GBP3,750,000.
Acquisition
The acquisition includes the ongoing operations of a Bermuda
based Class C licensed insurance company with managed assets of
over $290m and in-force policies of over $750m.
Ninety-five percent (95%) of the insurance holding company is
being acquired by a wholly owned subsidiary of Alpha Growth, with
the remaining 5% being retained by the existing Chairman and seller
of the company. The seller and Chairman of the insurance company
will remain on the Board of Directors of the holding company and
will be joined by Gobind Sahney and Jason Sutherland.
The licensed insurance company provides an excellent platform
for Alpha to offer life insurance-based wealth management products,
life insurance linked funds such as the BlackOak Alpha Growth Fund,
and longevity risk coverage that enhance longevity asset backed
securities created by Alpha and other sponsors. All activities are
subject to regulatory approval and oversight.
Alpha Growth intends to aggressively grow this business
utilising a build and buy strategy, there is also a significant
opportunity to market our existing strategies to clients of the
insurance business.
The acquisition is subject to the approval of the Bermuda
Monetary Authority and is expected to complete this quarter,
further updates and information will be provided in due course.
Business Update
We are also pleased to announce that the BlackOak Alpha Growth
Fund (the "Fund") achieved a net return of 10.63% for the calendar
year 2020, this earned the Fund a top 5 position in the prestigious
BarclayHedge yearly performance rankings in the Fixed Income -
Asset-Backed/Insurance Linked Securities category for 2020. This is
a great achievement for both the Fund and those that invest in
it.
Over the course of 2020, the Fund grew by more than 100% and now
has over $22 million in AUM - the Fund continues to be very popular
and attract new investors, we anticipate continued growth
throughout 2021 and beyond.
As previously announced, the Company's discussion with the
Warehouse Loan/Short Term Credit Facility counterparty are almost
concluded and an update will be provided during Q1. To simplify the
in-person due diligence requirements, this process now includes
direct asset investments by the asset manager. The Company is in
the process of reviewing opportunities for these direct asset
purchases which will further contribute to our assets under
management and fee revenue.
The company also continues to progress the Alpha Growth &
Income ("AGI") strategy, this strategy is a combination of life
settlements and life contingent structured settlements hedged by a
life insurance policy that is suitable for investors seeking
cashflow and growth, funded in either a separate managed account or
as a co-mingled fund with a minimum investment of $50 million. Its
anticipated that this strategy is complementary with the announced
acquisition.
Updates will be provided on all the strategies at an appropriate
time.
Gobind Sahney, Executive Chairman of Alpha, commented:
"2020 was an important year for Alpha Growth, despite the
restrictions placed on the global business community by the
Covid-19 pandemic we managed to more than double the BlackOak Alpha
Growth Fund whilst also launching a number of key strategies to
grow the business.
We expect the continued growth of the Fund will help attract
larger investments and it should also benefit from achieving a top
5 category position in BarclayHedge's overall annual performance
ranking for the calendar year 2020, this award is in addition to
the 4 monthly BarclayHedge awards received throughout 2020.
Today's acquisition announcement is a significant step forward
for the company and demonstrates the ambition of Alpha Growth as
well as the scale of the future opportunity. Once the acquisition
completes the Alpha Growth group of companies will have circa $300m
assets under management, this represents a significant increase
from the $10m AUM at the beginning of 2020.
The placement, which was oversubscribed with minimal discount to
the share price, is a sign that the investment community is excited
about both our past performance and our future potential.
I would like to thank all our shareholders for their continued
support as we build Alpha Growth into a significant financial
services organisation."
Placing Information
The Placing, which will raise gross proceeds of GBP3,750,000,
was completed at a price of GBP0.02 per share with a warrant to
subscribe for an additional share at GBP0.03 valid for two years
from admission. The 187,500,000 Placing Shares being issued
represent approximately 77.8% per cent of the existing issued
ordinary share capital of the Company immediately prior to the
Placing.
Subject to the completion of the Placing, Pello Capital will be
awarded 18,750,000 warrants exercisable at the placing price of
GBP0.02p valid for two years.
In light of the Placing and the subsequent dilution to existing
shareholders, the Company announces that it will not make any use
of the subscription facility noted in its Prospectus of 2 September
2020 and that it will close the subscription. The Company has not
made the facility available or issued any shares pursuant to
it.
The issue of the Placing Shares is expected to take place on 8
March 2021 and is conditional on: (i) the Company passing certain
resolutions at its forthcoming annual general meeting to authorise
the issuance of the Placing Shares (ii) on the Financial Conduct
Authority approving a prospectus in accordance with the Prospectus
Rules and (iii) the Placing Shares being admitted to listing on the
Official List (standard listing segment) and to trading on the
London Stock Exchange's main market for listed securities. The
Placing Shares will rank pari passu in all respects with the
existing ordinary shares.
Further announcement will be made in due course in respect of
the annual general meeting and when the Prospectus has been
published.
**S **
For more information, please visit www.algwplc.com or contact
the following :
Alpha Growth plc +44 (0) 20 3959 8600
Gobind Sahney, Executive Chairman info@algwplc.com
Pello Capital Limited +44 (0) 20 7710 9610
Mark Treharne mt@pellocapital.com
About Alpha Growth plc
Specialist in Longevity Assets
Alpha Growth plc is a financial advisory business providing
specialist consultancy, advisory, and supplementary services to
institutional and qualified investors globally in the multi-billion
dollar market of longevity assets. Building on its well-established
network, the Alpha Growth group has a unique position in the
longevity asset services and investment business, as a listed
entity with global reach. The group's strategy is to expand its
advisory and business services via acquisitions and joint ventures
in the UK and the US to attain commercial scale and provide
holistic solutions to alternative institutional investors who are
in need of specialised skills and unique access to deploy their
financial resource in longevity assets.
Longevity Assets and Non-correlation
As a longevity asset, it is non-correlated to the real estate,
equity capital and commodity markets. Its value is a function of
time because as time passes the value gets closer to the face value
of the policy. Hence creating a steady increase in the net asset
value of the investment. This makes it highly attractive to
investors wishing to counteract volatility within an investment
portfolio and add yield.
Note: The Company only advises on and manages Longevity Assets
that originate in the USA where the structured and life settlement
market is highly regulated.
Forward Looking Statements Disclaimer
Certain statements, beliefs and opinions in this document are
forward-looking, which reflect the Company's or, as appropriate,
the Company's directors' current expectations and projections about
future events. By their nature, forward-looking statements involve
a number of risks, uncertainties and assumptions that could cause
actual results or events to differ materially from those expressed
or implied by the forward-looking statements. These risks,
uncertainties and assumptions could adversely affect the outcome
and financial effects of the plans and events described herein.
Forward-looking statements contained in this document regarding
past trends or activities should not be taken as a representation
that such trends or activities will continue in the future. The
Company does not undertake any obligation to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. You should not place undue reliance on
forward- looking statements, which speak only as of the date of
this document. Readers should not treat the contents of this
document as advice relating to legal, taxation or investment
matters, and are to make their own assessments concerning these and
other consequences, including the merits of information and the
risks. Readers of this announcement are advised to conduct their
own due diligence and agree to be bound by the limitations of this
disclaimer.
Important Notice
The content of this announcement has not been approved by an
authorised person within the meaning of the Financial Services and
Markets Act 2000 (FSMA). This announcement has been issued by and
is the sole responsibility of the Company. The information in this
announcement is subject to change.
This announcement is not an offer of securities for sale into
the United States. The securities referred to herein have not been
and will not be registered under the U.S. Securities Act of 1933,
as amended (the Securities Act), and may not be offered or sold,
directly or indirectly, in or into the United States, except
pursuant to an applicable exemption from registration. No public
offering of securities is being made in the United States. This
announcement is not for release, publication or distribution,
directly or indirectly, in or into the United States, Australia,
Canada, the Republic of South Africa, Japan or any jurisdiction
where to do so might constitute a violation of local securities
laws or regulations (a Prohibited Jurisdiction). This announcement
and the information contained herein are not for release,
publication or distribution, directly or indirectly, to persons in
a Prohibited Jurisdiction unless permitted pursuant to an exemption
under the relevant local law or regulation in any such
jurisdiction.
Pello Capital Limited (Pello) is authorised and regulated by the
Financial Conduct Authority in the United Kingdom. Pello is acting
solely as the Company's broker and placing agent in relation to the
Placing and for no one else in connection with the contents of this
announcement and will not regard any other person (whether or not a
recipient of this announcement) as its client in relation to the
contents of this announcement nor will Pello be responsible to
anyone other than the Company for providing the protections
afforded to their clients or for providing advice in relation to
the contents of this announcement. Apart from the responsibilities
and liabilities, if any, which may be imposed on Pello by FSMA or
the regulatory regime established thereunder, Pello accepts no
responsibility whatsoever, and makes no representation or warranty,
express or implied, for the contents of this announcement including
its accuracy, completeness or verification or for any other
statement made or purported to be made by it, or on behalf of it,
the Company or any other person, in connection with the Company and
the contents of this announcement, whether as to the past or the
future. Pello accordingly disclaims all and any liability
whatsoever, whether arising in tort, contract or otherwise (save as
referred to above), which it might otherwise have in respect of the
contents of this announcement or any such statement.
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END
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