30th Jul 2018 12:10
LONDON (Alliance News) - Investment firm City of London Group PLC on Monday said it has agreed to buy the entirety of financial services intermediary business Acorn to Oaks Financial Services Ltd.
A2O, City of London said, is 92% owned by Jason Oakley and his wife Claire Oakley. Jason Oakley is a director of a City of London Group subsidiary, whereas his wife is the chief executive of A2O.
City of London will pay GBP1.4 million up front, and then a potential further GBP5 million depending on performance.
The initial payment to the Oakleys will be through zero-coupon convertible loan notes which can be converted once A2O's accounts for its year ending March 2021 are completed, while A2O's other shareholders will get new shares in City of London.
City of London CEO Michael Goldstein said: "We are pleased to announce that City of London Group has entered into an agreement to acquire A2O, pending FCA approval. A2O fits perfectly into our sweet spot by focussing on SMEs and having a strong regional network.
"We are confident that this acquisition will be an important factor in helping to grow the lending side of the business."
As it was a related-party transaction, City of London said its independent directors consulted with the company's nomad Peel Hunt to determine that the acquisition is fair and reasonable.
City of London shares were untraded on Monday, last quoted at a price of 149.50 pence each.
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