TIDMBRW
RNS Number : 1715S
Brewin Dolphin Holdings PLC
19 December 2016
19 December 2016
Brewin Dolphin Holdings PLC
Acquisition of Duncan Lawrie Asset Management Limited
Summary
-- Acquisition of Duncan Lawrie Asset Management with funds
under management of GBP735m(1) and c.1,000 client relationships
-- Enhances adjusted earnings in year one and thereafter
-- On a pro-forma basis, total Group funds under management will increase to GBP36.1bn
-- Transaction financed through internal cash resources
1. Value as at 30 September 2016
Brewin Dolphin Holdings PLC ("Brewin Dolphin" or "the Company"
or "the Group") is pleased to announce that its wholly owned
principal subsidiary, Brewin Dolphin Limited ("BDL"), has agreed to
acquire (the "Transaction") the UK private client investment
management business of Duncan Lawrie (the "Business") through the
acquisition of Duncan Lawrie Asset Management Limited ("DLAM").
DLAM is the investment management subsidiary of Duncan Lawrie
Private Banking, the private banking arm of Camellia Plc
("Camellia"). The Transaction is subject to certain regulatory
approvals.
David Nicol, Chief Executive, commented: "DLAM is a high quality
investment management business and the acquisition is an excellent
fit for us given the shared business philosophy centred on a
personalised approach to client service. The transaction
demonstrates the attraction of Brewin Dolphin to wealth management
professionals and clients who value traditional, personalised
services coupled with an innovative, forward looking approach."
Overview of the Transaction
As part of the Transaction, DLAM's investment team of 11
investment managers and 8 investment support staff are expected to
join the London (17 employees) and Bristol (2 employees) offices of
the Group. The team, which will continue to be led by Seth Cowburn,
manages funds of approximately GBP735m (based on their value as at
30 September 2016) on behalf of approximately 1,000 client
relationships. Approximately 84% of these funds are managed on a
discretionary basis.
The consideration will comprise a cash payment on completion of
GBP25.5m and a payment to reflect the value of net assets in the
Business at that date (estimated at GBP2.5m). The Transaction will
be financed from the Group's own cash resources, which stood at
GBP171m at the end of the Company's financial year (30 September
2016). Completion of the Transaction is expected to take place
during the first half of 2017. On a pro-forma basis, the Group's
total funds under management, as at 30 September 2016, increase to
GBP36.1bn.
Based on the performance in the nine months to September 2016,
the annualised revenues of the Business are expected to be
approximately GBP6.2m, with annualised employment costs relating to
the 19 employees who are expected to join the Group of
approximately GBP1.4m. The annualised direct pre-tax profit related
to the Business is therefore expected to be approximately GBP4.8m.
It is estimated that Brewin Dolphin's incremental and ongoing
administrative, overhead and variable staff costs, as a result of
acquiring the Business, will be up to GBP1.1m per annum. Brewin
Dolphin's non-recurring project and transaction costs for the
acquisition are expected to be approximately GBP2.0m. The
Transaction is expected to be enhancing to adjusted earnings per
share from the financial year ending September 2017 onwards.
Brewin Dolphin was advised by N M Rothschild & Sons Limited
("Rothschild") and Ashurst LLP in relation to the Transaction.
Seth Cowburn, Head of Wealth Management at DLAM, commented: "The
investment management team at Duncan Lawrie Asset Management is
excited to be joining Brewin Dolphin particularly given that its
culture and investment style represent a natural home for DLAM.
This was important in our decision making, and with the entire
investment management team being welcomed by Brewin Dolphin, both
continuity of service and the staff will remain unchanged. Brewin
Dolphin's financial planning, research, infrastructure and
investment management expertise will considerably enhance the
service we can offer, and we see the sale to Brewin Dolphin as a
very positive development for both the clients and the investment
management team."
Further information about DLAM
DLAM has historically been the investment management subsidiary
of Duncan Lawrie Private Banking, the private banking arm of
Camellia. In 2013, as part of a group reorganisation, it sold the
right to the income from its investment management agreements, to a
fellow group subsidiary, Duncan Lawrie Limited ("DLL") in return
for DLL assuming responsibility for DLAM's costs. Client agreements
remained with DLAM as part of this reorganisation. As a result of
this business transfer, the last reported statutory financial
statements of DLAM, for the year ended 2015, as well as the year
prior to this, do not reflect the revenues or costs of the
Business. The immediate parent company of DLAM, from which it is
being acquired by Brewin Dolphin, is Duncan Lawrie Holdings
Limited. As part of the Transaction, the front office activities of
the Business, including the income rights relating to the
investment management agreements, will be transferred back into
DLAM ahead of completion. The fact that clients of the Business are
already contracted with DLAM means that client consent will not be
required to bring into effect the overall Transaction.
The gross assets of DLAM, represented by cash, were GBP2.5m as
of 30 September 2016.
For further information:
Brewin Dolphin
David Nicol, Chief Executive Tel: +44 (0)20 7428 4400
Andrew Westenberger, Finance Director Tel: +44 (0)20 7428 4400
FTI
David Waller Tel: +44 (0)20 37271651
Ed Berry Tel: +44 (0)20 37271046
Rothschild
Edward Griffin Tel: +44 (0)20 7280 5000
Rothschild, which is authorised and regulated in the United
Kingdom by the Financial Conduct Authority, is acting exclusively
as financial adviser to Brewin Dolphin and no one else in
connection with the matters referred to in this announcement and
will not be responsible to anyone other than Brewin Dolphin for
providing the protections afforded to clients of Rothschild nor for
providing advice in relation to the matters referred to in this
announcement.
Cautionary statement regarding forward-looking statements
Certain statements included in this announcement contain
forward-looking information concerning the strategy, operations,
financial performance or business of the Company and the Group and
other matters that are not historical facts. By their nature,
forward-looking statements involve a number of risks, uncertainties
and assumptions because they depend on future circumstances, and
relate to events, not all of which are within the Company's control
or can be predicted by the Company. Although the Company believes
that the expectations reflected in such forward-looking statements
are reasonable, no assurance can be given that such expectations
will prove to have been correct. Actual results could differ
materially from those set out in the forward-looking statements and
statements in this announcement regarding past trends or activities
should not be taken as a representation that such trends and
activities will continue in the future. Nothing in this
announcement should be construed as a profit forecast and no part
of these results constitutes, or shall be taken to constitute, an
invitation or inducement to invest in the Company, and must not be
relied upon in any way in connection with any investment decision.
Any forward-looking statements made herein by or on behalf of the
Company speak only as of the date they are made and you should not
place undue reliance on forward-looking statements. The information
contained in this announcement is subject to change without notice
and, except as required by applicable law, the Company expressly
disclaims any obligation or undertaking to update, amend or revise
publicly or review any of the forward-looking statements contained
in this announcement to reflect any changes in the Company's
expectations with regard thereto or any changes in events,
conditions or circumstances on which any such statement is
based.
This information is provided by RNS
The company news service from the London Stock Exchange
END
ACQEAFAPFSSKFAF
(END) Dow Jones Newswires
December 19, 2016 02:00 ET (07:00 GMT)
Brewin Dolphin (LSE:BRW)
Historical Stock Chart
From Apr 2024 to May 2024
Brewin Dolphin (LSE:BRW)
Historical Stock Chart
From May 2023 to May 2024