U.K.-based Rathbone Brothers PLC will acquire 100% of the issued share capital of investment manager Speirs & Jeffrey Ltd., and has raised approximately £60 million by placing new ordinary shares in the capital of the company, it said June 14.
Speirs & Jeffrey is the largest independent wealth manager in Scotland and has funds under management of £6.7 billion. The acquisition will raise Rathbone Brothers' pro forma funds under management by 18% to £44.5 billion.
Initial consideration for the acquisition is £104 million, comprising £79 million in cash, to be funded from a combination of internal cash resources and the proceeds of the equity placing, and the issuance of 1 million Rathbone Brothers shares valued at £25 million.
There is also the potential for contingent consideration of 600,000 shares, with an illustrative value of £15.0 million, conditional upon meeting certain administrative and procedural targets that enable the delivery of cost synergies, as well as earn-out payments and incentive awards of up to 5.2 million shares, with an illustrative value of £129 million, based on various performance targets.
The company completed the placing the same day it was announced, placing 2.4 million shares at 2,500 pence apiece via an accelerated book build, for gross proceeds of £60 million and net proceeds of about £58 million. Lindsell Train Ltd., a substantial shareholder of the company, committed to subscribe for 280,000 shares in the placing.
The new ordinary shares represent approximately 4.66% of the company's existing issued ordinary share capital prior to the placing. Peel Hunt LLP and RBC Europe Ltd. acted as joint book runners in connection with the placing.
The acquisition, which is subject to approval by the U.K. Financial Conduct Authority, is expected to complete in the third quarter.