iimia MitonOptimal (iMO) has conditionally agreed to merge with Liverpool-based Midas Capital Partners.
The acquisition values the new entity, Midas Capital, at approximately £140m.
iMO will acquire the entire issued share capital of Midas in exchange for the 27,500,129 new ordinary shares, representing about 48% of the enlarged capital. Midas shareholders will collect £59m cash in exchange for the shares.
The cash consideration will be funded through a combination of 7,000,000 new ordinary shares at 150p per share, which will raise £10.5m, and £40m through term loan facilities with the Bank of Scotland and iMO’s existing cash resources.
A general meeting will be held on 6 March, with 55.4% of existing iMO shareholders already indicated their intent to vote in favour of the deal.
The iMO and Midas directors believe the businesses are “complementary” and the merger will create a “pre-eminent player in the multi-asset fund manager market”. Total funds under management for the enlarged group will be about £2.9bn.
“The merger will increase the proportion of the iMO Group’s revenues that are recurring and spread the iMO Group’s central costs over a broader business base,” the joint statement reads.
“In addition, the directors and the proposed directors expect merger synergies of at least £2.5m per annum (pre-tax) once the existing group and Midas have been fully integrated.”
The new enlarged group will continue to operate through three divisions: fund management (operating under the ‘‘Midas’’ and ‘‘Miton’’ brands), wealth management (operating under the ‘‘iimia’’ brand) and corporate services (operating under the ‘‘Intelli’’ brand).
Simon Edwards, currently CEO of Midas, will be appointed as managing director with overall responsibility for the fund management division.
He comments: “Our confidence in the investment products of the merged group is demonstrated by the Midas management team’s commitment to reinvest a substantial proportion of the cash received, at least £20m, into these products.”IFAonline
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