2nd Apr 2020 14:11
(Alliance News) - Fund, corporate, and private client services firm JTC PLC has bought US-based NES Financial for USD40.0 million, it said on Thursday.
NESF provides specialist fund administration services. It is based in San Jose, California, and was founded in 2005. It has 58 employees in both California and Boston, Massachusetts.
JTC is issuing 7.5 million shares to NESF and also paying USD250,000 in cash. It said the purchase is a "key" part of its ongoing growth strategy as well as developing services in the US.
However, JTC could end up paying a total of USD116.0 million, all in shares, depending on whether NESF reaches earnings targets over the next two years.
In 2019, NESF achieved revenue of USD13.2 million, compared to GBP77.3 million for JTC in 2018. Results for 2019 have not yet been released, having been delayed due to a request from UK regulators for a moratorium on results publications amid Covid-19.
JTC Chief Executive Nigel le Quesne commented: "The US is a key growth market for the group and we believe NESF is the perfect partner and platform to drive the strategic expansion of our ICS division and in particular our US fund administration business. We have been in dialogue with the NESF team for around a year as a potential partner and provider of technology services and we are delighted to welcome them to the group.
"NESF is much more than just a US-based fund administrator; it brings to the group world-class technology capabilities developed in Silicon Valley, a hugely experienced and talented management team and staff, and a high-quality client book that encompasses private equity and real estate and market-leading positions in several niche sectors. We are delighted to welcome our new colleagues, clients and partners to the group and are excited for the future potential of this strategic acquisition."
JTC shares were 4.4% lower on Thursday afternoon in London at 411.00 pence each.
By George Collard; [email protected]
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