1st Apr 2014 08:20
LONDON (Alliance News) - Rathbone Brothers PLC Tuesday said it has raised GBP24.4 million via a share placing to fund two acquisitions.
Rathbones said it agreed to acquire Jupiter Fund Management PLC's private client and charity investment management business in a deal that could be worth up to GBP53.9 million.
The wealth manager also will pay GBP14.3 million buy part of the London private client wealth-management business of Tilney Investment Management Ltd.
Rathbones said it has raised GBP24.4 million before expenses from institutional investors through a placing of about 1.3 million shares at 1,814 pence each, approximately 2.9% of its issued share capital. Rathbones said it raised the funds because its new acquisitions will deplete the surplus capital it holds for acquisitions.
Rathbones appointed Canaccord Genuity Limited and Peel Hunt LLP as joint bookrunners, joint brokers and agents for the placing.
Rathbones shares were Tuesday quoted at 1839.00 pence, up 1.4%.
In a statement, Rathbones said it expects to pay a total GBP57.4 million for the two acquisitions.
It has agreed to buy Jupiter's private client and charity investment management business for a minimum GBP32.0 million. However, the final price tag depends on the size and mix of funds under management transferred at completion in relation to the GBP2.1 billion in funds under management on March 14. The final consideration will also take into account additions or withdrawals, but not market movements until completion.
If funds under management remain at GBP2.1 billion the consideration would be GBP43.1 million. Rathbones said its project and transaction costs in 2014 are expected to be approximately GBP1.8 million. It expects the transaction is expected to be earnings enhancing in 2015.
In a statement, Jupiter Fund Management Chief Executive Maarten Slendebroek said the transaction, expected to complete towards the end of the third-quarter, was in private clients' long-term interests because Jupiter is now predominantly a mutual fund provider.
Jupiter Fund Management shares were Tuesday quoted at 415.40 pence, up 3.6%.
Meanwhile, Rathbone's acquisition of part of the London private client wealth management business of Tilney Investment Management will add GBP700.0 million to funds under management if all were to transfer. That would result Rathbones paying GBP14.3 million to Tilney between completion and January 2016.
Tilney is part of Deutsche Asset & Wealth Management. Rathbones said the transaction is expected to result in a small accretion in earnings in 2014 and to be earnings-enhancing in 2015.
Chief Executive Philip Howell said the acquisitions make for "an excellent fit".
"They demonstrate the merits of Rathbones to both clients and investment management teams, as well as our ability to capitalise on earnings-enhancing acquisition opportunities to grow our business," Howell said in a statement.
"We expect to see more acquisition opportunities in the private client industry in the short to medium term. Raising capital now will give us flexibility to continue to take advantage of similar opportunities as they arise," Howell added.
By Samuel Agini; [email protected]; @samuelagini
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