LEI: 213800L5751QTTVEA774
THIS ANNOUNCEMENT AND THE
INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR
DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR
INTO THE UNITED STATES, AUSTRALIA, CANADA,
THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF
THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE
UNLAWFUL TO DO SO
28
June 2024
This
announcement contains Inside Information
Marwyn Value Investors
Limited ("MVIL" or the "Company")
Marwyn Acquisition
Company II - acquisition of InvestAcc Group and follow-on
investment
The Company is pleased to announce
that funds managed by Marwyn Investment Management LLP have made an
investment of £16.7 million into investee company, Marwyn Acquisition Company II
Limited ("MAC II") as part
of MAC II's £30m fundraise and acquisition of InvestAcc Group
Limited, with £11.6m being attributable to the Company's ordinary
shares.
MAC II was founded by Marwyn and
Mark Hodges with a focus on the UK wealth and pensions market, and
starting with this platform acquisition, is seeking to build the
UK's leading specialist pensions administration business with an
initial focus on the self-invested personal pension ("SIPP") and small self-administered
scheme ("SSAS")
market.
Following the investment, MAC II is
expected to represent c.21% of the ordinary share Net Asset Value
("NAV"), contributing c.39p
to the NAV/ordinary share. Whilst the investment is expected to be
effective on 4 July 2024, the Company's NAV announcement for 28
June 2024 will include a pro-forma look-through allocation to
reflect the expected impact of the investment. The Company
continues to expect to pay quarterly dividends in August and
November 2024.
MAC II's announcement of the
acquisition and fundraise can be viewed here:
https://www.londonstockexchange.com/news-article/MAC2/acquisition-of-investacc-and-fundraising/16542601
Robert Ware, Chairman of MVIL
commented: "We are delighted by this enormously exciting investment
and the ongoing partnership with the MAC II team. Alongside the
excellent performance of both AdvancedAdvt and Zegona this year and
continued progression of the wider portfolio, this investment adds
another substantial asset to the Funds' investment portfolio with
significant potential to deliver material shareholder
value."
Background to the investment
InvestAcc is an award-winning
provider of SIPP and SASS services in the UK. MAC II believes
that InvestAcc provides the optimal strategic platform to
create value through a SIPP buy and build
strategy. The business benefits from being
a leading UK personal pension administrator, having a proven track
record of delivering exceptional customer service, scalable
operations and infrastructure, a strong financial profile and a
sustainable organic growth trajectory. All of the management team,
including the founder, are expected to stay with the business post
completion.
Strategic Rationale and market
opportunity
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1.
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InvestAcc is a highly scalable platform
business: an award-winning provider
of SIPP and SSAS services in the UK with a strong commitment to
high quality customer service and outcomes. This is evidenced by
their customer service score of 96%, winning best pension service
provider four years running between 2020 and 2023, and winning the
best SIPP provider in 2023. The business provides the optimal
strategic platform to create value, possessing scalable operations
and infrastructure, a strong financial profile - generating £8.8
million of revenue and £3.6 million of adjusted EBITDA for FY23 -
and a sustainable organic growth trajectory. The transaction
represents a unique opportunity to develop the UK's leading
specialist pensions administration business with an initial focus
on the SIPP Segment.
|
|
2.
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Long term structural market growth: favourable macroeconomic trends and the evolution of the
pension industry have created a drive towards personal pensions
(including SIPPs). The total SIPP market assets under
administration are expected to grow at an 8% CAGR over the next
5-years from c.£500 billion to c.£750 billion.
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|
3.
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Excellent underlying business
fundamentals: full SIPP
administrators typically have a customer retention rate of above
90%, creating an ongoing fee-based revenue stream. The average SIPP
plan lasts for more than 25 years, benefitting from embedded growth
through contractual inflation-linked fees. Industry average EBITDA
margins exceed 30% with strong cashflow
conversion.
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4.
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Near term M&A consolidation opportunity with a robust
pipeline: there is a highly
attractive M&A landscape for acquiring "Full" SIPP and "Simple"
SIPP administrators across a range of sellers. Regulatory pressure,
underpinned by a push for higher levels of consumer duty care, as
well as vendor needs, are driving the sector to actively
consolidate. MAC II has a robust pipeline primarily sourced
directly by the management team who are in active discussions in
relation to five potential acquisitions with vendors which combined
could deliver more than £20 billion of AuA and 45,000 customers in
2024 and 2025.
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|
5.
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A
sector leading team with M&A track
record: MAC II's management team
have over 65 years of combined operational and strategic experience
in the financial services and wealth sector, and have led multiple
successful transactions. The MAC II management team are supported
by Marwyn's M&A and capital markets expertise, who have a track
record of successful public market fund raises, having raised over
£3.9 billion to date across 12 comparable vehicles delivering £4.9
billion in gross equity profits for investors.
|
The acquisition is subject to the
approval of the Financial Conduct Authority.
R
Class Investment
Approximately £0.1
million of the Marwyn fund investment is attributable to the
2021 Realisation shares of MVIL. As it is over 3 years since the
creation of the 2016 Realisation shares of MVIL, there is no
allocation to the 2016 Realisation shares.
This announcement contains inside
information for the purposes of Article 7 of
the UK version of EU Regulation 596/2014 which forms part
of UK law by virtue of the European Union (Withdrawal)
Act 2018, as amended ("MAR"), and is disclosed in accordance
with the Company's obligations under MAR. The person responsible
for making this announcement is Robert Ware, Chairman, PO Box 309,
Ugland House, Grand Cayman, KY1-1104, Cayman
Islands.
Company enquiries:
Marwyn Value Investors
Limited
Scott Danks
07700 720303
Company Secretary - Aztec Financial
Services (Jersey) Limited
Chris Copperwaite / Magdala
Mullegadoo
01534 833000
Investor Relations
Kam Bansil
020 7039 1901
PR Adviser - FGS Global
Rollo Head: 07768 994987
Chris Sibbald: 07855
955531
Corporate Broker - Liberum Capital
Limited
Chris Clarke / Owen
Matthews
0203 100 2200
Shares in the Company are not
designed or intended for retail investors. Marwyn Investment
Management LLP, the Manager, does not promote shares in the Company
to retail investors and they should not be offered to retail
investors.