TIDMASTO
RNS Number : 5574P
AssetCo PLC
21 June 2022
This announcement contains inside information under Article 7 of
the Market Abuse Regulation (EU) No. 596/2014 (as amended) as it
forms part of the domestic law of the United Kingdom by virtue of
the European Union (Withdrawal) Act 20187 (as amended).
21 June 2022
For Immediate Release
AssetCo plc
("AssetCo" or the "Company")
Conditional acquisition of SVM Asset Management Holdings Limited
by AssetCo
AssetCo (AIM: ASTO), the agile asset and wealth management
company, is pleased to announce that it has reached agreement to
acquire the entire issued share capital of SVM Asset Management
Holdings Limited, the holding company to SVM Asset Management
Limited (together "SVM"), (the "Acquisition") for a total
consideration of approximately GBP10.7 million (the
"Consideration"), subject to completion balance sheet adjustments.
The Consideration will be satisfied by the issue of up to GBP9
million 1% fixed rate unsecured convertible loan notes in AssetCo
(the "Loan Notes") and, subject to balance sheet adjustments,
approximately GBP1.7 million in cash, in each case to be paid on
completion of the Acquisition.
The Loan Notes may, at the option of the Company or a majority
of the holders of the Loan Notes, be converted into fully paid
ordinary shares of 10p each in the Company ("Ordinary Shares") at
an effective issue price of GBP14.50 per Ordinary Share. Unless
converted the Loan Notes will be repaid on 31 December 2023.
The Acquisition is conditional on, inter alia, approval by the
FCA to a change in controller which is expected to occur by the end
of September 2022. The Company will provide further updates, as
appropriate.
About SVM
SVM is an independent, FCA regulated fund management business
based in Edinburgh, which was founded in 1990 by Colin McLean and
Margaret Lawson, whom, together with a family trust, are the
significant majority owners. SVM currently has around GBP586
million of assets under management (AuM), including five open-end
funds: UK Growth, UK Opportunities, Continental Europe, All Europe
SRI and World Equity. SVM also manages SVM UK Emerging Fund plc, a
GBP6.8 million investment trust listed on the London Stock
Exchange.
SVM generated turnover of GBP4.3 million and a profit before
taxation of GBP2.0 million for the financial year ended 31 December
2021 and had net assets of GBP14.0 million as at 31 December 2021.
Post a restructuring that is currently being undertaken by SVM it
is anticipated that, at completion of the Acquisition, SVM will
have net assets and net cash reserves of approximately GBP4 million
each. For the three months ended 31 March 2022, SVM generated
turnover of GBP945,451 and an operating profit of GBP139,726.
Following completion of the Acquisition, Colin, who is Managing
Director and Chief Investment Officer of SVM, will become a
director of AssetCo's Scottish business. Colin will focus on
ensuring a smooth transition for SVM's business and its clients, as
well as helping to set the strategic direction of AssetCo's
Scottish business. It is AssetCo's intention to build a strong
asset management hub in Edinburgh, focused on managing listed
equities.
Importantly, Margaret Lawson, who is UK investment director at
SVM, will continue in her role managing UK equity portfolios, as
will Neil Veitch, Global and UK investment director, and Hugh
Cuthbert, European investment manager. SVM's existing 21 employees
will continue to be employed by SVM.
To support the continued growth of SVM and AssetCo's Scottish
business, Martin Gilbert, Chairman of AssetCo , Peter McKellar,
Deputy Chairman of AssetCo, and Alex Hoctor-Duncan, Chief Executive
Officer of AssetCo's listed equity platform and Chief Executive
Officer of AssetCo's River and Mercantile asset management business
("River and Mercantile Asset Management"), will join the board of
SVM on completion of the Acquisition.
Benefits to AssetCo
SVM has a 30-year track record of solid and steady performance
and client service and a CEO in Colin McLean who has been a leading
industry figure for several decades. AssetCo believes that the
acquisition of SVM will enhance its growing Scottish, as well as
wider UK, brand and significantly bolster the strength of its
Scottish board with the addition of Colin McLean, Garry Fyfe
(Finance Director) and Jonathan Hewitt (Non-Executive
Director).
AssetCo believes that, given the strong investment performance
delivered by SVM's fund managers, there are significant
opportunities to enhance the distribution and marketing of SVM's
existing funds and, over time, to broaden the product offering. The
SVM funds will also complement the existing listed equity fund
strategies offered by AssetCo's various businesses, most notably
those offered by River and Mercantile Asset Management. Following
completion AssetCo will have approximately GBP3.5 billion of AuM in
listed equity fund strategies across its various businesses. SVM
and AssetCo have strong distribution capabilities as well as strong
organic growth and the combination of the two, plus the wider
product offerings, should result in a much stronger and broader
combined entity.
SVM is to spearhead AssetCo's plans to have a significant asset
management hub in Edinburgh, which already includes Saracen Fund
Managers and Revera Asset Management (subject to regulatory
approval). In aggregate the three businesses have over GBP800
million of AuM. All three businesses will retain their distinct
active equity investment philosophies and client profiles, however,
the intention is that they will share compliance, operational,
distribution and marketing resources with River and Mercantile
Asset Management.
Colin McLean, Managing Director of SVM, commented:
"When I set up SVM our aim was to leverage quality research and
strong fundamentals to underpin our independent thinking and
deliver great investor value. I believe that our performance over
the years demonstrates that we have been able to achieve this. I am
pleased that with the backing of AssetCo we will be able to
continue to build our focus on, and relationships with, existing
clients, creating greater value for them, whilst also broadening
our client base and growing assets."
Martin Gilbert, Chairman of AssetCo, commented:
"We are immensely proud to be building an asset management hub
in Edinburgh that, over time, will broaden its client base across
the UK and beyond. SVM is a well-regarded fund management firm,
with a recognised investment style and a very strong investment
track record. Its business model, people and product offering are
its key assets, and it is core to AssetCo's ambitions.
"I have known Colin and Margaret for over 30 years, and I am
delighted that both have agreed to remain with SVM. Both have built
phenomenal reputations as investment managers over many decades in
the industry. The experience and expertise they will bring to
AssetCo will be invaluable. I am also heartened that fund managers
of the calibre of Hugh and Neil have committed to the business, as
they have important roles to play. We are looking forward to
working with the four of them, and the rest of the SVM team, as we
develop a business to meet the evolving long-term financial needs
of investors."
Enquiries:
AssetCo plc
Campbell Fleming, CEO
Peter McKellar, Deputy Chairman
James Thorneley, Head of Communications +44 (0) 79 5800 5141
Numis Securities Limited
Nominated Adviser and Joint Broker
Stephen Westgate / Giles Rolls +44 (0) 20 7260 1000
Panmure Gordon (UK) Limited
Joint Broker
Charles Leigh-Pemberton / Atholl
Tweedie / Gabriel Hamlyn +44 (0) 20 7886 2906
Maitland/amo
PR Adviser +44 (0) 79 0000 0777 /
Neil Bennett / Rachel Cohen +44 (0) 75 5717 8196
Forster Chase
Adviser to SVM
Chris Grove +44 (0) 77 1469 1565
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