Sanne Group PLC Acquisition of Luxembourg Investment Solutions (1694S)
September 29 2017 - 1:01AM
UK Regulatory
TIDMSNN
RNS Number : 1694S
Sanne Group PLC
29 September 2017
29 September 2017
Sanne Group plc
("SANNE" or "the Group")
Acquisition of Luxembourg Investment Solutions S.A. ("LIS") and
Compliance Partners S.A. ("CP") ("Acquisition")
Signing of increase in Revolving Credit Facility ("RCF") taking
total facilities to GBP90 million
SANNE, a leading provider of alternative asset and corporate
administration services, is pleased to announce that it has entered
into an agreement to acquire Luxembourg Investment Solutions S.A.
and Compliance Partners S.A., (the "Acquired Companies").
Highlights
-- Strengthens the Group's presence in Luxembourg, a globally significant market for Alternative Assets, to a
combined team of more than 100 people
-- Enhances SANNE's ability to provide a full service offering to its global institutional client base
-- LIS is a leading third party Alternative Investment Fund Manager (AIFM) with assets under administration in
excess of EUR8.3billion
-- LIS is authorised to deliver Management Company ("ManCo") services to both Alternative Investment Funds (AIFs)
and open ended mutual funds (UCITS) within the EU
-- CP provides primarily unregulated corporate services to its clients
-- Initial acquisition value payable of circa EUR55 million split approximately 36% in new SANNE shares and the
balance in cash. Additionally an earn-out payment is expected to be made in 2019, based on performance of the
Acquired Companies in the year ended 31 December 2018
-- The Acquisition is expected to be immediately earnings enhancing
-- Conditional upon certain regulatory clearances and is expected to complete in Q1 2018
-- Extension to the RCF signed with HSBC increasing total facilities to GBP90 million
LIS is a leading third-party AIFM headquartered in Luxembourg
with a branch in Dublin. Clients are spread across Private Equity,
Real Estate, Private Debt and Infrastructure funds. LIS is
regulated under the supervision of Commission de Surveillance du
Secteur Financier (CSSF).
CP primarily provides unregulated services, including corporate
services, for both LIS and external clients, enabling clients to
have a physical presence in Luxembourg.
The Acquired Companies together employ more than 70 people. The
principal managers and shareholders of the businesses, Dr Thomas
Goergen, Pierre Weimerskirch and Daniel Kranz, (the "Managers")
will remain with the Group post completion.
This transaction is consistent with SANNE's stated strategy to
supplement strong organic growth with complementary acquisitions
which enable the business to take advantage of a consolidating
market and diversify its client base, geographic positioning and
service offering. The Acquisition will provide SANNE with a leading
platform in Luxembourg, a globally significant market, from which
to broaden its services to existing alternatives clients and
improve SANNE's competitive positioning in attracting new clients.
The Acquisition follows SANNE's recently granted licence by the
Central Bank of Ireland to provide services from its Dublin
operation, further strengthening the Group's ability to provide
integrated fund administration, depositary and AIFM services to its
global alternatives clients. The Acquisition will also enable SANNE
to leverage the Group's integrated technology platforms and
expertise across its global footprint.
The consideration for the Acquisition is made up of an initial
element and an earn-out element. The initial consideration payment
is expected to be circa EUR55 million. This will be 64% payable in
cash and 36% payable in SANNE shares. The earn-out payment is
expected to be paid in 2019 and is based on the Acquired Companies'
performance in the year ended 31 December 2018. The total
consideration payable is subject to an absolute cap of
EUR100 million.
The share consideration payable as part of the initial
consideration will be calculated with reference to SANNE's average
five day weighted average closing share price up to 27 September
2017 of 765p. The Managers will be subject to a restricted sale
agreement which locks-in their consideration shares for a maximum
of four years. An equal element of their shares will become
unlocked on each annual anniversary of this announcement. It is
intended that the cash earn-out payment will be funded through the
Group's operating cash flows and existing facilities.
The Acquired Companies have experienced significant growth in
recent years, with combined EBITDA growing at an annual rate of 28%
between 2014 and 2016. In the year ended 31 December 2016, LIS made
EBITDA of EUR1.4 million and had gross assets of EUR2.4 million,
whilst CP made EBITDA of EUR0.2 million and had gross assets of
EUR0.4 million. The reported EBITDA includes non-underlying costs
which will not be incurred by SANNE post completion. The Acquired
Companies are expected to report a normalised EBITDA to 31 December
2017 of circa EUR4.2 million.
SANNE has today also entered into an agreement with HSBC to
extend the Group's existing RCF from GBP14 million to GBP44
million, under the terms of the Group's debt facility. The
extension of the facility will be used to fund the consideration
for the Acquisition and for general corporate purposes.
Dean Godwin, Chief Executive Officer of Sanne Group plc,
commented:
"The addition of LIS and CP into our existing Luxembourg
operations is a significant development for us. The acquisition
will add further quality and scale to our existing business whilst
also deepening our alternative asset service offering with a market
leading AIFM service in Luxembourg. LIS and CP are led by a highly
experienced and respected team that has established a platform with
a focus on providing its clients with the highest quality services.
This closely aligns with our own philosophy. Luxembourg is an
important jurisdiction for us as we continue to work with, and
service, international alternative asset managers launching funds
in Europe."
Dr Thomas Goergen, Founding Managing Partner at LIS
commented:
"We are very excited to be joining SANNE. Being part of a global
business will enable us to access an extensive range of
complementary services from across the Group. These will naturally
add value to our clients going forward and will help us to continue
to meet the ever increasing global service requirements from
them."
Enquiries:
Sanne Group plc
Dean Godwin, Chief Executive
Officer
Spencer Daley, Chief Financial
Officer +44 (0) 1534 722 787
Investec Bank plc
Garry Levin / James Ireland
Ed Thomas / Matt Lewis +44 (0) 20 7597 5970
Tulchan Communications LLP
Tom Murray +44 (0) 20 7353 4200
Notes:
SANNE provides administration, reporting and fiduciary services
to leading alternative asset managers, financial institutions,
family offices and corporates. The Group employs more than 1,200
people worldwide and administers structures and funds that have in
excess of GBP200 billion of assets.
The Group has a presence in 15 established strategic locations
spread across the Americas, EMEA and Asia-Pacific.
This announcement contains inside information.
SANNE is listed on the Main Market of the London Stock
Exchange.
sannegroupplc.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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