22nd Mar 2005 07:00
Close Brothers Group PLC22 March 2005 22 March 2005 CLOSE BROTHERS GROUP PLC ("CLOSE BROTHERS") ANNOUNCES THE ACQUISITION OF SEYDLER AG ("SEYDLER") The Board of Close Brothers announces that, subject to receipt of regulatoryclearance in Germany, it has agreed to purchase Seydler, a specialist broker/dealer and market-maker based in Frankfurt owned by the Seydler family. Theinitial consideration for the purchase is €23.5 million, payable in cash oncompletion, subject to adjustment following the determination of Seydler'scompletion balance sheet. Further consideration will be payable, expected to bein the range of €4-6 million, dependent on the results of Seydler in the twoyears to 31st December 2006. In the year to 31st December 2004, Seydler had netrevenue of €21 million and earned a profit before tax of around €3.6 millionafter adjusting for the impact of certain one-off items. Seydler is one of the leading securities trading firms present on the floor ofthe Frankfurt stock exchange, the largest of the seven floor exchanges operatingin Germany. Seydler's particular strengths are in managing the floor tradingorder books of foreign equities and bonds and domestic bonds in Frankfurt whereit ranks within the top two by value. It is also the leading market-maker in thetrading of US equities on Xetra, Deutsche Borse's electronic order book system.Its presence at the Dusseldorf stock exchange provides it with the rights toexecute orders in substantially all German domestic equities. Since 2002, in response to Deutsche Borse's efforts to enhance liquidity in theshares of smaller companies traded on Xetra, Seydler has been active in seekingto become the official designated sponsor to such companies. This fee-earningrole includes a requirement to promote liquidity in the client's shares with thepotential to increase Seydler's trading volumes and participate in shareplacements on behalf of both client companies and institutional investors.Seydler is mandated by 77 German companies to act as their designated sponsor,providing it with the longest list of such quoted corporate clients in theGerman market. Mr Hans Goehtz and Mrs Hannelore Eberz, members of the management board ofSeydler, have agreed to subscribe in cash for a minority interest of 8% in thebusiness, reflecting their confidence in and commitment to it. Seydler willoperate as a separate company, alongside Winterflood, within Close'smarket-making division. The Board of Close Brothers believes that Seydler represents an opportunity toacquire a securities trading business on attractive terms situated in the heartof Europe's largest and wealthiest economy with long term growth potential. Witha total of 79 employees, Seydler has the systems, licences and experiencedtrading teams to enable it to participate in a wide range of equity and fixedinterest trading activities. Furthermore, it has an opportunity to increase itsmarket share in German domestic equities trading following the recentannouncement by Deutsche Borse of changes to the system of floor trading inFrankfurt, the intention of which is to increase the volume of retailtransactions executed in that forum. Since 1998 Close Brothers has built its position in Germany through theacquisition of a majority stake in Freyberg Close Brothers, a leading mid marketcorporate finance firm, and the creation of Close Finance GmbH, a fast growingdebt factoring business. Press enquiries: Close Brothers Group plc: Colin Keogh, Chief Executive - +44 20 7426 4000Brunswick Group LLP: Rupert Young - +44 20 7396 7428 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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