27 February 2020
Brooks Macdonald Group plc
Notice of completion of acquisition of Cornelian and issuance of shares
Brooks Macdonald Group plc ("Brooks Macdonald", the "Group" or the "Company") is pleased to announce that the pre-conditions to the acquisition of Cornelian Asset Managers Group Limited ("Cornelian"), including receipt of approval from the Financial Conduct Authority, have been satisfied.
The only outstanding condition is admission of 453,172 ordinary shares (the "Consideration Shares") to trading on AIM to settle part of the upfront consideration. An application has been made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM which is expected to take place at 8am on 28 February 2020, at which point the acquisition will complete.
Caroline Connellan, Brooks Macdonald Chief Executive, commented:
"I am delighted to announce that we expect to complete our acquisition of Cornelian tomorrow, having received regulatory approval. Our experience of working with our new colleagues over recent months has reinforced our belief in the complementary nature of the two businesses.
"We look forward to welcoming Cornelian's clients and intermediaries and ensuring that both firms' clients benefit from the broader range of products and services of the combined group. The acquisition of Cornelian is a significant step forward in our strategy of delivering sustainable, value-enhancing growth."
Cornelian senior team
As part of the acquisition, the Group is delighted to welcome new colleagues who will bring additional skills and experience to complement the existing team, including the Cornelian senior team:
· Jeremy Richardson, CEO of Cornelian, will continue to play an important role in the coming months, supporting the transfer of Cornelian clients to Brooks Macdonald, whilst simultaneously ensuring Cornelian remains focused on delivering the very best service to its clients and professional connections
· John Jackson, currently MD Intermediary Business at Cornelian, will join Brooks Macdonald as Director of Products & Propositions, and will work closely with our business heads to ensure our offering meets our clients' and advisers' expectations
· Marcus Brooks, currently Director Private Clients & Charities at Cornelian, will report into Robin McAdam, Head of our Scotland Office, as Senior Investment Director
· Hector Kilpatrick, Cornelian's Chief Investment Officer will join the Group CIO team as Senior Investment Director, reporting to Richard Spencer, Group Chief Investment Officer
· Regina Jackson, Cornelian's Operations and HR Director, will lead the integration from the Cornelian perspective, working closely with Group Chief Operating Officer, Jason Wood.
Shares in issue and total voting rights
Following admission of the Consideration Shares to trading, the number of ordinary shares in the Company in issue and number of voting rights will be 16,125,831. This figure may be used by Shareholders as the denominator for the calculations by which they will determine whether they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
Enquiries to:
Brooks Macdonald Group plc Caroline Connellan, CEO Ben Thorpe, Finance Director |
www.brooksmacdonald.com 020 7499 6424 |
Peel Hunt LLP (Nominated Adviser and Broker) Guy Wiehahn / John Welch |
020 7418 8900 |
MHP Communications Reg Hoare / Simon Hockridge / Charlie Barker |
020 3128 8734 |
Notes to editors - Brooks Macdonald
Brooks Macdonald Group plc, through its various subsidiaries, provides leading investment management services in the UK and internationally. The Group, which was founded in 1991 and began trading on AIM in 2005, had discretionary funds under Management of £13.1 billion as at 31 December 2019.
Brooks Macdonald offers a range of investment management services to private high net worth individuals, pension funds, institutions, charities and trusts. The Group also provides financial planning as well as offshore investment management and acts as fund manager to a regulated OEIC providing a range of risk-managed multi-asset funds and a specialised absolute return fund.
The Group has thirteen offices across the UK and the Channel Islands including London, East Anglia, Hampshire, Leamington Spa, Leeds, Manchester, Taunton, Tunbridge Wells, Wales, Scotland, Jersey, and Guernsey.
Notes to editors - Cornelian
Cornelian is an independent, well-established and profitable wealth management business, with 39 staff including 12 investment professionals, based in Edinburgh. As at 30 September 2019, it had £1.4bn of FUM1, all managed on a discretionary basis. Its investment offering includes two ranges of multi-asset OEIC funds and segregated discretionary portfolios. It operates a centralised investment team with distribution and servicing separated into two segments:
• Intermediated business (£0.9bn1 at 30 September 2019): principally distributing Cornelian's successful fund ranges through financial advisers
• Direct business (£0.5bn1 at 30 September 2019): dealing principally with private clients (£0.4bn1) but also with small books of charity and pension fund business (together accounting for £0.1bn1), all with direct client relationships
Cornelian has a track record of delivering growth with total FUM increasing by £0.75bn1 since 2014, representing an annual growth rate of 17%, driven predominantly by multi-asset funds sold through intermediaries. It has more than doubled its revenue during the same period , although the business saw modest net outflows in 2019, in line with weaker client sentiment reflected across the sector. Based on its management accounts for the year ended 30 September 2019, Cornelian generated revenue of £10.3m1 and an EBITDA of £3.4m1 in the year.
[1] Based on audited Cornelian accounts for year to 30 September 2019
Notes to editors - strategic rationale
Cornelian's business is complementary to the Group's existing discretionary fund management activities and will further strengthen its existing investment management, client, and intermediary expertise. The acquisition is a significant step forward for Brooks Macdonald's stated strategy of delivering sustainable, value-adding growth.
Cornelian's c.450 direct clients and the c.500 financial advisers through which it distributes its multi-asset funds range will benefit from the Group's broader product and service offering. The direct clients will benefit from financial planning and see continuity of their investment manager relationship. All clients will benefit from the combined research resources and broader platform of the enlarged Group.
Integration planning has progressed well while we awaited regulatory approval, and the Group remains confident that the acquisition will deliver material levels of both cost synergies, driving the estimated underlying EPS accretion of 9% in the first full financial year following completion, as previously announced, as well as revenue synergies that will contribute further to medium- and longer-term growth.
