Acquisition of Duncan Lawrie Asset Management Ltd

19 December 2016

Brewin Dolphin Holdings PLC

Acquisition of Duncan Lawrie Asset Management Limited

Summary

· Acquisition of Duncan Lawrie Asset Management with funds under management of £735m(1) and c.1,000 client relationships

· Enhances adjusted earnings in year one and thereafter

· On a pro-forma basis, total Group funds under management will increase to £36.1bn

· Transaction financed through internal cash resources

1. Value as at 30 September 2016

Brewin Dolphin Holdings PLC ("Brewin Dolphin" or "the Company" or "the Group") is pleased to announce that its wholly owned principal subsidiary, Brewin Dolphin Limited ("BDL"), has agreed to acquire (the "Transaction") the UK private client investment management business of Duncan Lawrie (the "Business") through the acquisition of Duncan Lawrie Asset Management Limited ("DLAM"). DLAM is the investment management subsidiary of Duncan Lawrie Private Banking, the private banking arm of Camellia Plc ("Camellia"). The Transaction is subject to certain regulatory approvals.

David Nicol, Chief Executive, commented: "DLAM is a high quality investment management business and the acquisition is an excellent fit for us given the shared business philosophy centred on a personalised approach to client service. The transaction demonstrates the attraction of Brewin Dolphin to wealth management professionals and clients who value traditional, personalised services coupled with an innovative, forward looking approach."

Overview of the Transaction

As part of the Transaction, DLAM's investment team of 11 investment managers and 8 investment support staff are expected to join the London (17 employees) and Bristol (2 employees) offices of the Group. The team, which will continue to be led by Seth Cowburn, manages funds of approximately £735m (based on their value as at 30 September 2016) on behalf of approximately 1,000 client relationships. Approximately 84% of these funds are managed on a discretionary basis.

The consideration will comprise a cash payment on completion of £25.5m and a payment to reflect the value of net assets in the Business at that date (estimated at £2.5m). The Transaction will be financed from the Group's own cash resources, which stood at £171m at the end of the Company's financial year (30 September 2016). Completion of the Transaction is expected to take place during the first half of 2017. On a pro-forma basis, the Group's total funds under management, as at 30 September 2016, increase to £36.1bn.

Based on the performance in the nine months to September 2016, the annualised revenues of the Business are expected to be approximately £6.2m, with annualised employment costs relating to the 19 employees who are expected to join the Group of approximately £1.4m. The annualised direct pre-tax profit related to the Business is therefore expected to be approximately £4.8m. It is estimated that Brewin Dolphin's incremental and ongoing administrative, overhead and variable staff costs, as a result of acquiring the Business, will be up to £1.1m per annum. Brewin Dolphin's non-recurring project and transaction costs for the acquisition are expected to be approximately £2.0m. The Transaction is expected to be enhancing to adjusted earnings per share from the financial year ending September 2017 onwards.

Brewin Dolphin was advised by N M Rothschild & Sons Limited ("Rothschild") and Ashurst LLP in relation to the Transaction.

Seth Cowburn, Head of Wealth Management at DLAM, commented: "The investment management team at Duncan Lawrie Asset Management is excited to be joining Brewin Dolphin particularly given that its culture and investment style represent a natural home for DLAM. This was important in our decision making, and with the entire investment management team being welcomed by Brewin Dolphin, both continuity of service and the staff will remain unchanged. Brewin Dolphin's financial planning, research, infrastructure and investment management expertise will considerably enhance the service we can offer, and we see the sale to Brewin Dolphin as a very positive development for both the clients and the investment management team."

Further information about DLAM

DLAM has historically been the investment management subsidiary of Duncan Lawrie Private Banking, the private banking arm of Camellia. In 2013, as part of a group reorganisation, it sold the right to the income from its investment management agreements, to a fellow group subsidiary, Duncan Lawrie Limited ("DLL") in return for DLL assuming responsibility for DLAM's costs. Client agreements remained with DLAM as part of this reorganisation. As a result of this business transfer, the last reported statutory financial statements of DLAM, for the year ended 2015, as well as the year prior to this, do not reflect the revenues or costs of the Business. The immediate parent company of DLAM, from which it is being acquired by Brewin Dolphin, is Duncan Lawrie Holdings Limited. As part of the Transaction, the front office activities of the Business, including the income rights relating to the investment management agreements, will be transferred back into DLAM ahead of completion. The fact that clients of the Business are already contracted with DLAM means that client consent will not be required to bring into effect the overall Transaction.

The gross assets of DLAM, represented by cash, were £2.5m as of 30 September 2016.

For further information:

FTI

David Waller Tel: +44 (0)20 37271651

Ed Berry Tel: +44 (0)20 37271046

Rothschild

Edward Griffin Tel: +44 (0)20 7280 5000

Rothschild, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively as financial adviser to Brewin Dolphin and no one else in connection with the matters referred to in this announcement and will not be responsible to anyone other than Brewin Dolphin for providing the protections afforded to clients of Rothschild nor for providing advice in relation to the matters referred to in this announcement.

Cautionary statement regarding forward-looking statements

Certain statements included in this announcement contain forward-looking information concerning the strategy, operations, financial performance or business of the Company and the Group and other matters that are not historical facts. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions because they depend on future circumstances, and relate to events, not all of which are within the Company's control or can be predicted by the Company. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Actual results could differ materially from those set out in the forward-looking statements and statements in this announcement regarding past trends or activities should not be taken as a representation that such trends and activities will continue in the future. Nothing in this announcement should be construed as a profit forecast and no part of these results constitutes, or shall be taken to constitute, an invitation or inducement to invest in the Company, and must not be relied upon in any way in connection with any investment decision. Any forward-looking statements made herein by or on behalf of the Company speak only as of the date they are made and you should not place undue reliance on forward-looking statements. The information contained in this announcement is subject to change without notice and, except as required by applicable law, the Company expressly disclaims any obligation or undertaking to update, amend or revise publicly or review any of the forward-looking statements contained in this announcement to reflect any changes in the Company's expectations with regard thereto or any changes in events, conditions or circumstances on which any such statement is based.