News and Press
| Date: | 23rd March 2005 |
| Title: | RENSBURG PLC |
| Author: | |
| Download: | pdf version |
RENSBURG PLC
ACQUISITION TO CREATE THE UK’S SEVENTH LARGEST PRIVATE CLIENT FUND
MANAGER WITH £10.3 BILLION FUNDS UNDER MANAGEMENT
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Transformational acquisition of Carr Sheppards Crosthwaite to create the seventh largest private client wealth manager in the UK with £10.3 billion of funds under management. |
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Compelling strategic fit based on a common vision and complementary geographic and service strengths. |
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Creation of a new independent listed investment management group with revenues of approximately £84 million. (1) |
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Considerable scope to grow future revenues of the enlarged group by improving overall return on funds under management towards the industry benchmark of 100 basis points. |
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The directors and proposed directors expect the acquisition to be significantly earnings enhancing for the enlarged group for the first full financial year post completion. (2) |
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Carr Sheppards Crosthwaite forecast profit before tax(3) for the year ending 31 March 2005 of £8.3 million, after net non-recurring charges of £7.3 million. |
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Rensburg profit before tax(3) for the year ending 30 November 2004 of £8.8 million. |
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Expected annual pre-tax cost synergies of £5.5 million, a significant proportion of which is expected to be achieved in the year ending 31 March 2007. |
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The enlarged group will adopt Rensburg Sheppards as the corporate name and brand. |
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Christopher Clarke will be Chairman of Rensburg Sheppards plc, Michael Burns Chief Executive, Stephen Elliott Managing Director and Jonathan Wragg Finance Director. |
Commenting on the acquisition, Michael Burns, Chief Executive of Rensburg and proposed Chief Executive of Rensburg Sheppards, said:
“This combination is a unique opportunity to create one of the leading private client wealth management groups extending our franchise throughout the UK. The clear financial and commercial benefits for all our stakeholders are supported by a strong strategic fit, common vision, shared culture and low risk integration plan. I am confident that Rensburg Sheppards will be well positioned to grow revenues, benefit from cost savings and continue to develop as an attractive stand alone listed entity.”
Stephen Elliott, Chief Executive of Carr Sheppards Crosthwaite and proposed Managing Director of Rensburg Sheppards, said:
“This transaction represents a significant step forward for Carr Sheppards Crosthwaite which will benefit the business and its clients by creating value, deepening our presence in the UK and bringing together complementary investment products. We are very enthusiastic about this combination.”
Structure and financial terms
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Carr Sheppards Crosthwaite is a wholly-owned subsidiary of Investec. The transaction will be effected by the acquisition of Carr Sheppards Crosthwaite through the issue of 25.5 million new Rensburg ordinary shares and a £60 million subordinated loan to Investec. Investec has agreed to transfer 2.8 million of its consideration shares to an Employee Benefit Trust (“EBT”) to be established for the benefit of certain key Carr Sheppards Crosthwaite employees. |
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Following Completion, Investec will own approximately 47.7% of Rensburg’s enlarged share capital, existing Shareholders will own approximately 46.4%, with the balance of Rensburg’s Ordinary Shares held by the EBT. |
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Furthermore, for a period of five years following completion, Investec has undertaken not to vote in excess of 30% of the voting rights of the issued share capital of Rensburg Sheppards. |
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As part of the acquisition terms, Rensburg shareholders will be entitled to a Special Dividend of 45 pence per existing ordinary share, expected to be paid on 18 May 2005. |
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Rensburg will issue to Investec a subordinated loan of £60 million at completion. The total amount is repayable in equal instalments over eight years, following a repayment holiday of two years. |
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Based upon the price of 500p per Ordinary Share, being the price at which trading in Rensburg ordinary shares was suspended on 10 December 2004, the acquisition values Carr Sheppards Crosthwaite at approximately £188 million. |
Rensburg is being advised by Fenchurch
Advisory Partners and Rothschild. Investec is being advised
by Goldman Sachs and Putnam Lovell NBF. Numis Securities is sponsor and
corporate broker to Rensburg.
This summary should be read in conjunction with the full text of the announcement.
Enquiries:
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Fenchurch Advisory Partners,
which is authorised and regulated by the Financial Services Authority
in the UK, is acting for Rensburg and no one else in connection with the
transaction and will not be responsible to any person other than Rensburg
for providing the protections afforded to the clients of Fenchurch
Advisory Partners nor for providing advice in relation
to the transaction.
Rothschild, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection
with the transaction and will not be responsible to any person other than
Rensburg for providing the protections afforded to the clients of Rothschild
nor for providing advice in relation to the transaction.
Numis Securities, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Rensburg and no one else in connection
with the transaction and will not be responsible to any person other than
Rensburg for providing the protections afforded to the clients of Numis
nor for providing advice in relation to the transaction.
Goldman Sachs, which is authorised and regulated by the Financial Services
Authority in the UK, is acting for Investec and no one else in connection
with the transaction and will not be responsible to any person other than
Investec for providing the protections afforded to the clients of Goldman
Sachs nor for providing advice in relation to the transaction.
Putnam Lovell NBF, which is authorised and regulated by the Financial
Services Authority in the UK, is acting for Investec and no one else in
connection with the transaction and will not be responsible to any person
other than Investec for providing the protections afforded to the clients
of Putnam Lovell NBF nor for providing advice in relation to the transaction.
Notes:
(1) Based on the most recent audited annual accounts.
(2) Before goodwill amortisation and exceptional items. This statement
should not be construed as a profit forecast or be interpreted to mean
that the future earnings per share of the Enlarged Group will necessarily
be greater than the historic published earnings per share figures for
Rensburg for the year ended 30 November 2004.
(3) Before exceptional items and amortisation of goodwill.
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