21st Jun 2022 11:59
(Alliance News) - AssetCo PLC on Tuesday said it has reached an agreement to buy Edinburgh-based SVM Asset Management Holdings Ltd, building its Scottish presence.
Shares in the London-based advisory and asset management firm were up 5.5% to 717.50 pence each in London on Tuesday midday.
AssetCo will buy SVM through the issue of up to GBP9.0 million in 1% fixed rate unsecured convertible loan notes in AssetCo and, subject to balance sheet adjustments, around GBP1.7 million in cash. The loan notes can be converted into AssetCo shares at GBP14.50 per share; otherwise, they will be repaid at the end of 2023.
SVM is a fund management business with around GBP586 million of assets under management.
In 2021, it booked pretax profit of GBP2.0 million on GBP4.3 million in revenue. Post a restructuring that is currently being undertaken by SVM, AssetCo said SVM is expected to have net assets and net cash reserves of approximately GBP4 million each.
AssetCo said that the acquisition of SVM will "enhance" its growing Scottish brand. It plans to build a strong asset management hub in Edinburgh, focused on managing listed equities, the company added.
Chair Martin Gilbert said: "We are immensely proud to be building an asset management hub in Edinburgh that, over time, will broaden its client base across the UK and beyond. SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record. Its business model, people and product offering are its key assets, and it is core to AssetCo's ambitions."
Gilbert was the co-founder of Aberdeen Asset Management.
The acquisition requires approval by UK financial sector regulator the Financial Conduct Authority, which is expected by the end of September.
AssetCo recently completed the GBP99 million acquisition of River & Mercantile Group PLC.
By Sophie Rose; [email protected]
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