14th Jun 2023 17:05
(Alliance News) - Jersey-based fund management company JTC PLC on Wednesday said it agreed to acquire TC3 Group Holdings Ltd, trading as South Dakota Trust Co, for a maximum consideration of USD270 million.
JTC said the acquisition of the US personal trust sector-focused administration services provider would be satisified by an initial consideration of USD147 million in cash, followed by a maximum of USD53 million in new JTC shares.
A further earn-out of up to USD70 million will be payable in cash and JTC shares upon the achievement specific revenue performance targets for the two-year period ending December 2025, JTC added.
The acquisition is subject to customary US merger control as well as regulatory approval in South Dakota, JTC said, and is expected to complete before the end of August 2023.
JTC said the acquisition will be funded by its existing cash reserves and debt facilities, alongside the proceeds of a proposed placing of new shares to raise gross proceeds of around GBP62 million, representing approximately 6% of JTC's current issued share capital.
The placing of shares will not exceed 10% of current issued share capital, JTC said, while details of a placing price per share will be issued "as soon as practicable after the close of the bookbuilding process".
The placing is not conditional upon the approval of JTC shareholders, it said.
"SDTC is a great addition to the JTC group. It is a market-leader in the fast-growing personal trust market in the US, which in turn is the largest in the world. It has a highly committed, service-focused team with deep client relationships, an outstanding track record of profitability and growth, and is hugely complementary to our existing US operations, particularly our existing South Dakota business and building on our acquisition of [New York Private Trust Co] last year," said JTC Chief Executive Officer Nigel Le Quesne.
"Not only does it bring us greater scale in the US, it also provides significant opportunities to offer our wider private client services to their high net worth and ultra-high net worth family clients. The acquisition also very much delivers on our previously announced strategy to grow a market leading US personal trust business. We are delighted to welcome SDTC's valued colleagues, clients and partners and very much look forward to the significant opportunities ahead of us in this exciting growth market."
South Dakota Trust Co Co-Founder & Co-CEO Al King said: "We have an enormous amount in common [with JTC] including our commitment to our clients, our culture and our professional expertise. We know the JTC team well having worked with them for over seven years, and see significant opportunities to expand our combined offering to clients and their advisors, so that we can meet more of their needs in this fast growing private client market."
Regarding its own operations, JTC said that good momentum has continued in its current financial year and the group continues to trade in line with market expectations for the full year.
Shares in JTC closed up 1.1% to 723.00 pence each in London on Wednesday.
By Greg Rosenvinge, Alliance News reporter
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