Acquisition of wealth management business in RoI

THIS ANNOUNCEMENT IS RESTRICTED AND IS NOT FOR PUBLIC RELEASE, PUBLICATION, OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES (AS DEFINED HEREIN), AUSTRALIA, CANADA, JAPAN, HONG KONG, SINGAPORE, SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. PLEASE SEE THE IMPORTANT NOTICE AT THE END OF THIS ANNOUNCEMENT.

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (REGULATION 596/2014/EU) ("MAR"). IN ADDITION, MARKET SOUNDINGS (AS DEFINED IN MAR) WERE TAKEN IN RESPECT OF THE PLACING AND OTHER MATTERS CONTAINED IN THIS ANNOUNCEMENT, WITH THE RESULT THAT CERTAIN PERSONS BECAME AWARE OF SUCH INSIDE INFORMATION AS PERMITTED BY MAR. UPON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE THIS INSIDE INFORMATION IS NOW CONSIDERED TO BE IN THE PUBLIC DOMAIN. THEREFORE, UPON THE PUBLICATION OF THIS ANNOUNCEMENT, THOSE PERSONS WHO RECEIVED INSIDE INFORMATION IN A MARKET SOUNDING ARE NO LONGER IN POSSESSION OF INSIDE INFORMATION RELATING TO THE COMPANY AND ITS SECURITIES.

10 May 2019

Brewin Dolphin Holdings PLC

("Brewin Dolphin", the "Group" or the "Company")

Acquisition of wealth management business in the Republic of Ireland

Further to its announcement of 15 April 2019, Brewin Dolphin is pleased to announce that its wholly owned subsidiary, Brewin Dolphin Wealth Management Limited ("Brewin Dolphin (Ireland)"), has entered into a binding agreement to acquire the wealth management business of Investec Group in the Republic of Ireland (the "Business"), (together, the "Transaction"). The net consideration after adjustments for surplus capital is expected to be c.€44m. The Transaction is subject to certain regulatory approvals and completion is expected to take place in the second half of 2019.

Summary

· Acquisition of a growing business in one of Europe's fastest growing economies, with attractive demographics; consistent with Brewin Dolphin's strategy of growth in assets under management.

· Builds on Brewin Dolphin's existing business in the Republic of Ireland ("RoI"), to create a top 3 wealth management business[1] in RoI with assets under management and advice ("AuMA") in excess of €4.6bn[2].

· Brings, together with the Group's existing RoI investment team, a culturally aligned, high-quality investment team of 33, covering c.5,000 client relationships.

· The investment team will be joined by only the necessary support staff required to support the expanded business on an ongoing and combined basis.

· The Group will leverage its existing efficient RoI platform and acquire the Business with the investment team and only the necessary support staff as explained above, thereby delivering cost synergy benefits from completion and minimising integration risk.

· Consideration at completion will comprise €37.15m of goodwill plus a payment equal to the value of the tangible net assets in the Business on that date. The value of the tangible net assets at completion is expected to be c.€15m, substantially above the current expected standalone regulatory capital requirement of the Business of c.€7m. The net consideration is therefore expected to be c.€44m, after adjusting for surplus capital.

· The acquired Business would be expected to generate a pre-tax profit contribution of c.€4.5m[3] in the year to 31 March 2019.

· The Business has seen growth in total AuMA of c.€0.8bn since 2015, representing an annual growth rate of c.8% and has grown its revenues over the last two years at c.20% annually.

· Based on the adjusted net consideration, the Transaction expected to be enhancing to adjusted earnings per share on a pro forma basis from completion[4].

· Group's total funds as at 31 March 2019 expected to increase to £44.8bn[5] on a pro forma basis.

David Nicol, Chief Executive, commented:

"This acquisition, which is consistent with our strategy of growth in assets under management, provides us with an exciting opportunity to strengthen substantially our existing presence in the Republic of Ireland, one of Europe's fastest growing economies. We will also be in a stronger position to benefit from the country's growing demand for discretionary and advice-led services, supported by favourable demographics, with the country having the youngest population in Europe. Our businesses are highly compatible in terms of culture, values, investment philosophy and client centric approach, which combined with our established platform, will enable us to meet more effectively the growing demand for wealth management services in both the UK and the Republic of Ireland."

Overview of the Transaction

Brewin Dolphin Holdings PLC is pleased to announce that its wholly owned subsidiary in RoI, Brewin Dolphin Wealth Management Limited, has agreed to acquire the wealth management business of the Investec Group in RoI through the acquisition of Investec Capital & Investments (Ireland) Limited ("ICIIL", or the "Acquired Company"). This Transaction is subject to certain regulatory approvals and completion is expected to take place in the second half of 2019.

The consideration will be payable in cash and comprise of a payment on completion for goodwill of €37.15m as well as a payment to reflect the value of net tangible assets in the Business at that date. Net tangible assets at completion are expected to be c.€15m, and comprised almost entirely of cash. In the event that the tangible net assets are higher than this, the payment is capped at €17m. The current standalone regulatory capital requirement of the Business is c.€7m. The longer term incremental capital requirement of the combined business in RoI as a consequence of the acquisition is expected to be below this figure, with the result that the majority of the cash acquired is expected to be released over time.

The Business, which manages and administers €2.9bn in client funds, represents a rare opportunity for Brewin Dolphin to increase its scale in RoI, one of Europe's fastest growing economies. RoI represents a particularly attractive market given the favourable demographics, with the youngest population in Europe. Following completion of the Transaction, Brewin Dolphin (Ireland) will manage and administer funds in excess of €4.6bn in RoI.

The Business is a well-established and high quality wealth management business, headquartered in Dublin, with an additional office in Cork, and has grown its total funds from €2.1bn in March 2015 to €2.9bn as at 31 March 2019. During this period, the proportion of assets managed on a discretionary basis has increased steadily from c.21% to c.36%, and this trend is expected to continue.

The Transaction is being structured whereby Brewin Dolphin (Ireland) will acquire the Business with the investment team and only the necessary support staff required on an ongoing and combined basis to manage the expanded business. This will enable the Group's business in RoI to leverage its efficient existing platform to deliver cost synergy benefits from completion and substantially reduce integration risk.

Based on the management accounts for the year ended 31 March 2019, the revenues of the Business in the year to 31 March 2019 were c.€17.0m, which would represent an annualised growth rate of c.20% over the last two years. The costs within the Business, together with incremental costs to be incurred by the Group to run the Business, are expected to amount to c.€12.5m. The pre-tax profit contribution related to the Business is therefore expected to be c.€4.5m. The Transaction is expected to be enhancing to adjusted earnings per share on a pro forma basis from completion.

Further information in respect of the Transaction and Acquired Company

The Acquired Company is an Irish incorporated, CBI authorised and regulated MiFID entity. With the exception of two individuals, the staff currently supporting the Business are employed by a separate subsidiary of the Investec Group, with personnel costs recharged to the Acquired Company. As part of the Transaction, it is envisaged that 31 investment staff and 19 support staff will transfer to the Acquired Company at completion so that, along with the two individuals mentioned above, the Business will be supported by 52 individuals. Following the Transaction, by leveraging its existing efficient RoI platform, support services costs and recharges historically impacting the Acquired Company will not be incurred or are expected to be provided by Brewin Dolphin at a lower incremental cost. The Acquired Company also made a substantial non-recurring gain during the year ended 31 March 2018. As a result of these factors, the last reported statutory financial statements of the Acquired Company, being for the year ended 31 March 2018 as well as the years prior to this, do not reflect the costs and profits of the Business being acquired. The Acquired Company had gross assets of €45.1m at 31 March 2018, the level of which was substantially impacted by the proceeds relating to the non-recurring gain referred to above.

Clients of the Business are contracted with the Acquired Company and therefore client consent will not be required to bring into effect the overall Transaction. The Transaction is classified as a class two transaction for the purposes of the UK Listing Rules.

Proposed placing and use of proceeds

Brewin Dolphin also announces an intention to undertake a placing of new ordinary shares of the Company (the "Placing Shares"). The Placing Shares are intended to raise gross proceeds of c.£60m (before expenses). The placing is not conditional on the completion of the acquisition.

The Placing is being undertaken to maintain a strong Group regulatory capital level, thus providing the Group with continued financial flexibility to take advantage of further development opportunities. In-line with the Group's stated strategy, it has committed to invest c.£70m in inorganic growth initiatives comprising ICIIL, the acquisition of the assets and staff of Epoch Wealth Management LLP and three other smaller recent acquisitions, as well as some strategic initiatives over the last 12 months. Assuming a 31 March 2019 acquisition and consolidation of ICIIL and Epoch and the £60m placing, the pro forma regulatory capital ratio would be c.196%.

Brewin Dolphin was advised by N M Rothschild & Sons Limited ("Rothschild & Co") and Arthur Cox (Ireland) in relation to the Transaction. Liberum Capital Limited ("Liberum") and RBC Europe Limited ("RBC") are acting as joint corporate brokers to Brewin Dolphin. Travers Smith LLP are acting as legal advisers to Brewin Dolphin in relation to the placing.

For further information:

IMPORTANT NOTICES

This Announcement and the information contained in it is not for public release, publication or distribution, in whole or in part, directly or indirectly, in or into the United States (including its territories and possessions, any state of the United States and the District of Columbia, collectively the "United States"), Australia, Canada, Hong Kong, Singapore, Japan or South Africa or any other state or jurisdiction in which publication, release or distribution would be unlawful.

THIS ANNOUNCEMENT IS FOR INFORMATION PURPOSES ONLY AND DOES NOT CONSTITUTE AN OFFER TO SELL OR ISSUE, OR THE SOLICITATION OF AN OFFER TO BUY, ACQUIRE OR SUBSCRIBE FOR SHARES IN THE CAPITAL OF THE COMPANY IN THE UNITED STATES, AUSTRALIA, CANADA, JAPAN, HONG KONG, SINGAPORE OR SOUTH AFRICA OR ANY OTHER STATE OR JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORISED OR TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF SUCH JURISDICTIONS.

The Placing Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of the United States and may not be offered, sold, delivered or transferred, directly or indirectly, in or into the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. The Company does not intend to register any portion of the issue in the United States or to conduct a public offering of securities in the United States.

No prospectus has been lodged with, or registered by, the Australian Securities and Investments Commission or the Japanese Ministry of Finance; and the Placing Shares have not been, and nor will they be, registered under or offered in compliance with the securities laws of any state, province or territory of Australia, Japan or South Africa. Accordingly, the Placing Shares may not (unless an exemption under the relevant securities laws is applicable) be offered, sold, resold or delivered, directly or indirectly, in or into Australia, Japan or South Africa or any other jurisdiction outside the United Kingdom or to, or for the account or benefit of any national, resident or citizen of Australia, Japan or South Africa.

No prospectus will be made available in connection with the matters contained in this Announcement and no such prospectus is required (in accordance with the Prospectus Directive (as defined below)) to be published.

No action has been taken by the Company, Liberum or RBC, or any of their respective affiliates, that would, or which is intended to, permit a public offer of the Placing Shares in any jurisdiction or the possession or distribution of this Announcement or any other offering or publicity material relating to the Placing Shares in any jurisdiction where action for that purpose is required. Any failure to comply with these restrictions may constitute a violation of the securities laws of such jurisdictions. Persons into whose possession this Announcement comes shall inform themselves about, and observe, such restrictions.

No public offering of the Placing Shares is being made in the United States, United Kingdom, Australia, Canada or elsewhere. All offers of the Placing Shares will be made pursuant to an exemption under the EU Directive 2003/71/EC and amendments thereto (the "Prospectus Directive") from the requirement to produce a prospectus. This Announcement is being distributed to persons in the United Kingdom only in circumstances in which section 21(1) of the Financial Services and Markets Act 2000, as amended (the "FSMA") does not apply.

Any investment or investment activity to which the Placing relates is available only to, and will only be engaged with: (a) persons in member states of the European Economic Area who are qualified investors within the meaning of article 2(1)(e) of the Prospectus Directive ("Qualified Investors") and (b) if in the United Kingdom, persons who (i) have professional experience in matters relating to investments who fall within the definition of "investment professionals" in article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), or are high net worth companies, unincorporated associations or partnerships or trustees of high value trusts as described in article 49(2) of the Order and (ii) are "qualified investors" as defined in section 86 of the FSMA and (c) otherwise, to persons to whom it may otherwise be lawful to communicate it (all such persons together being referenced to as "relevant persons"). Any person who is not a relevant person should not act or rely on this Announcement or any of its contents.

N. M. Rothschild & Sons Limited, which is authorised and regulated by the Financial Conduct Authority in the United Kingdom, is acting for Brewin Dolphin and no one else in relation to the Transaction and will not be responsible to anyone other than Brewin Dolphin for providing the protections afforded to clients of N. M. Rothschild & Sons Limited nor for providing advice in relation to the proposed.

Liberum is authorised and regulated by the FCA in the United Kingdom and is acting exclusively for the Company and no one else and Liberum will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice and/or any other matter referred to in this Announcement.

RBC is authorised by the Prudential Regulatory Authority (the "PRA") and regulated by the FCA and the PRA in the United Kingdom and is acting exclusively for the Company and no one else and RBC will not be responsible to anyone (including any Placees) other than the Company for providing the protections afforded to its clients or for providing advice and/or any other matter referred to in this Announcement.

This Announcement is being issued by and is the sole responsibility of the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by Liberum or RBC (apart from the responsibilities or liabilities that may be imposed by the FSMA or the regulatory regime established thereunder) or by any of their respective affiliates or by any of their respective directors, officers, employees, advisers, representatives or shareholders (collectively, "Representatives") for the contents of this Announcement or any other written or oral information made available to or publicly available to any interested party or its advisers or any other statement made or purported to be made by or on behalf of Liberum or RBC or any of their respective affiliates or by any of their respective Representatives in connection with the Company, the Placing Shares or the Placing and any responsibility and liability whether arising in tort, contract or otherwise therefore is expressly disclaimed. Liberum and RBC and each of their respective affiliates and each of their Representatives accordingly disclaim all and any liability, whether arising in tort, contract or otherwise (save as referred to above) in respect of any statements or other information contained in this Announcement and no representation or warranty, express or implied, is made by Liberum or RBC or any of their respective affiliates or any of their respective Representatives as to the accuracy, fairness, verification, completeness or sufficiency of the information contained in this Announcement and nothing in this Announcement is, or shall be relied upon as, a promise or representation in this respect, whether as to the past or future.

The distribution of this Announcement and the offering of the Placing Shares in certain jurisdictions may be restricted by law. No action has been taken by the Company and/or Liberum or RBC that would permit an offering of such shares or possession or distribution of this Announcement or any other offering or publicity material relating to such shares in any jurisdiction where action for that purpose is required. Persons into whose possession this Announcement comes are required by the Company, Liberum and RBC to inform themselves about, and to observe, such restrictions.

This Announcement does not identify or suggest, or purport to identify or suggest, the risks (direct or indirect) that may be associated with an investment in the Placing Shares. Any investment decision to buy Placing Shares in the Placing must be made solely on the basis of publicly available information, which has not been independently verified by Liberum or RBC.

This Announcement contains (or may contain) certain forward-looking statements with respect to certain of the Company's current expectations and projections about future events. These statements, which sometimes use words such as "aim", "anticipate", "believe", "intend", "plan", "estimate", "expect" and words of similar meaning, reflect the beliefs of the Company's directors and expectations and involve a number of risks, uncertainties and assumptions which could cause actual results and performance to differ materially from any expected future results or performance expressed or implied by the forward-looking statement. Statements contained in this Announcement regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The information contained in this Announcement is subject to change without notice and, except as required by applicable law, none of the Company, Rothschild & Co, Liberum or RBC or any of their respective affiliates or any of their respective Representatives assumes any responsibility or obligation to update publicly or review any of the forward-looking statements contained in this Announcement. You should not place undue reliance on forward-looking statements, which speak only as of the date of this Announcement. No statement in this Announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will necessarily match or exceed the historical or published earnings of the Company.

The information in this Announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the Securities Act or the applicable laws of other jurisdictions.

The Placing Shares to be issued pursuant to the Placing will not be admitted to trading on any stock exchange other than the London Stock Exchange.

Neither the content of the Company's website nor any website accessible by hyperlinks on the Company's website is incorporated in, or forms part of, this Announcement.

This Announcement does not constitute a recommendation concerning any investor's options with respect to the Placing. Each investor or prospective investor should conduct his, her or its own investigation, analysis and evaluation of the business and data described in this Announcement. The price and value of securities can go down as well as up. Past performance is not a guide to future performance. The contents of this Announcement are not to be construed as legal, business, financial or tax advice. Each investor or prospective investor should consult his, her or its own legal adviser, business adviser, financial adviser or tax adviser for legal, financial, business or tax advice.

Solely for the purposes of the product governance requirements contained within: (a) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (b) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II; and (c) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (ii) eligible for distribution through all distribution channels as are permitted by MiFID II (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the Offer. Furthermore, it is noted that, notwithstanding the Target Market Assessment, Liberum and RBC will only procure investors who meet the criteria of professional clients and eligible counterparties.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of MiFID II; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares.

Each distributor is responsible for undertaking its own Target Market Assessment in respect of the Placing Shares and determining appropriate distribution channels.