STM Group PLC Acquisition (0886W)
August 13 2020 - 7:35AM
UK Regulatory
TIDMSTM
RNS Number : 0886W
STM Group PLC
13 August 2020
STM Group Plc
("STM" or "the Company" or "the Group")
Acquisition of SSAS ("SSAS") and International Group Pension
Plan ("GPP") businesses
STM Group Plc (AIM:STM), the cross-border financial services
provider, is pleased to announce the acquisition of two
inter-related businesses in the UK and international pensions
sectors (the "Acquisition").
STM Group Plc has acquired 100% of the share capital of Berkeley
Burke (Financial Services) Ltd and Berkeley Burke Employee Benefit
Consultants Ltd from Berkeley Burke Group Limited, which together
provide administration and consultancy services to Small
Self-administered Pension schemes in the UK and to large and medium
sized UK and international businesses, delivering pension solutions
for their UK and overseas employees. Both businesses have been in
existence for decades and come with a good quality portfolio of
clients. These businesses are independent of the Berkeley Burke
SIPP business, which has previously been sold to another party.
The Acquisition, which is not subject to regulatory approval,
will be for a maximum consideration of GBP2.9 million on a debt
free/cash free basis, comprised of GBP1.4 million initial
consideration and a further GBP1.5 million of contingent deferred
consideration based on revenue hurdles that apply to existing
business and opportunities in the pipeline. Up to GBP1 million
contingent consideration is payable at the first anniversary and a
maximum of GBP0.5 million at the second anniversary of the date of
acquisition.
Each business has normalised annual recurring revenue of
approximately GBP1 million and comes with a competent and qualified
staff resource. The SSAS business will allow for efficiency gains
when it is integrated into our existing UK operations, and the UK
and international group pension plan business will strengthen our
position in that sector, fully supporting and endorsing our
international pension offerings from Malta and Gibraltar. Given the
initial acquisition costs and phased integration plan, the
Acquisition is anticipated to breakeven in the first twelve months,
however is expected to make a profit contribution of approximately
GBP0.6 million annually thereafter. Aggregated accounts for the
year to 30 June 2020 show revenue of GBP1.9 million, profit before
tax of GBP0.1m and net assets at that date of GBP0.2m, for the
combined businesses.
The consideration will be funded out of existing cash resources
and a new credit facility. The Company has received Credit
Committee Approval from Royal Bank of Scotland International
Limited for a new GBP5.5m credit facility to be used purely for
acquisitions, details of which will be provided following
completion of documentation.
Alan Kentish, CEO of STM Group, commented:
"We are really pleased to get this acquisition under our belt;
it has been a long time coming but we needed to find the right
acquisition for us. The SSAS and GPP businesses fit nicely within
our existing operations and complement some of our imminent
expansion plans in the international pension space. I am delighted
to welcome Grahame Berkeley, who will act as a consultant to the
business for the foreseeable future, and his dedicated staff to the
STM family. In addition, finalization of the new bank facility will
allow us to further continue to pursue our acquisition strategy for
other opportunities."
Grahame Berkeley, Chairman and majority owner of the Berkeley
Burke businesses, added:
"I am delighted that the businesses I have built up over the
last 47 years are becoming part of the STM Group. I have watched
STM's expansion over the last few years and their relatively recent
entry into the UK market. I have no doubt that I and my loyal and
very able staff will be able to add significant value to STM. I am
particularly excited by the opportunity to help STM move their
international businesses forward."
The information communicated in this announcement is inside
information for the purposes of Article 7 of Regulation
596/2014.
For further information, please contact:
STM Group Plc www.stmgroupplc.com
Alan Kentish, Chief Executive Officer Tel: Via Walbrook
Therese Neish, Chief Financial Officer
finnCap www.finncap.com
Matt Goode / Emily Watts - Corporate Finance Tel: +44 (0) 20 7220
Tim Redfern / Richard Chambers - ECM 0500
Walbrook www.walbrookpr.com
Tom Cooper / Paul Vann Tel: +44 (0) 20 7933
8780
Mob: +44 (0) 797 122
1972
tom.cooper@walbrookpr.com
Notes to editors:
STM is a multi-jurisdictional financial services group which is
listed on the AIM Market of the London Stock Exchange. The Group
specialises in the administration of client assets in relation to
retirement, estate and succession planning and wealth
structuring.
Today, the Group has operations in the UK, Gibraltar, Malta,
Jersey and Spain. STM has developed a range of pension products for
UK nationals and internationally domiciled clients and has two
Gibraltar Life Assurance Companies which provide life insurance
bonds - wrappers in which a variety of investments, including
investment funds, can be held.
STM's growth strategy is focussed on both organic initiatives
and strategic acquisitions.
Further information on STM Group can be found at
www.stmgroupplc.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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