16th Jan 2025 11:13
(Alliance News) - Petershill Partners PLC said Thursday it has sold its majority interest in investment firm General Catalyst, with part of the proceeds going towards a special dividend.
Shares in the FTSE 250 listing rose 2.8% to 266.20 pence each in London on Thursday morning.
Petershill, which specialises in alternative investments, said it has sold the stake for USD726 million. The consideration is being paid through interest-bearing loan notes.
Petershill explained USD207 million worth is expected to be paid in cash by the end of March, with the remainder being repaid "over time". The notes will have a 10% initial annual interest rate.
"The impact of the sale is a reduction to 2025 distributable earnings of approximately 9%, based on current consensus distributable earnings of USD382 million, predominately reflecting reduced partner fee-related earnings," the firm added, explaining the deal will trim its fee-related earnings margin by round "4 percentage points".
The consideration represents a 62% premium to the USD447 million carrying value of the assets as at the end of June.
Petershill said the deal "addresses the divergence between General Catalyst's future business plan and Petershill Partners' alternative asset management investment strategy".
"Since the initial investment was made into General Catalyst in 2018, the business model of General Catalyst has evolved significantly from a pureplay venture capital firm into a global investment and transformation company, which is expected to result in a shift from management fee-centric earnings towards longer term performance-related value creation. Consequently, the change is less aligned with the Petershill Partners' alternative asset management investment strategy," it explained.
Petershill plans to pay a special dividend of 14.0 US cents per share, USD151 million in total.
A majority of the net proceeds from the deal will go towards "redeployment into new investments".
By Eric Cunha, Alliance News news editor
Comments and questions to [email protected]
Copyright 2025 Alliance News Ltd. All Rights Reserved.