U.K.-based TP Icap PLC will acquire Louis Capital Markets and MidCap Partners for an initial cash consideration of $21 million plus a deferred noncontingent consideration of $6 million that will be paid over a period of two years.
The acquisition has a further deferred contingent consideration amounting to $17 million, payable depending on the performance of the business over a period of three to five years. There is also potential additional consideration via profit sharing, dependent on the business' performance. The subsequent payments will be in cash, TP Icap said.
TP Icap expects the acquisition to add to its earnings from the first year of acquisition on an underlying basis and from the second year on a reported basis.
Louis Capital Markets and MidCap Partners, collectively known as Louis Capital, is a private brokerage group specializing in equities and fixed income. It operates in London and Paris, with offices in New York, Hong Kong and Tel Aviv. Louis Capital founders Michael Benhamou and Patrice Cohen will remain part of the company's senior management.
The transaction is expected to be completed in the first quarter of 2020, subject to regulatory approval by the U.K. Financial Conduct Authority and the Financial Industry Regulatory Authority in the U.S., as well as the fulfillment of customary completion deliverables and commercial conditions.