LONDON, UK: The Boards of Ince Group and Zeus Group Limited have reached an settlement for Zeus to acquire the entire issued share capital of Ince’s wholly owned subsidiary, Arden Partners plc.
Ince Group will obtain consideration of £1.0 million, payable in money on completion of the disposal, on the foundation of, inter alia, there being £1.0 million of free money in Arden and no materials excellent debt.
In addition, there’ll be earnout consideration payable by Zeus of as a lot as £2.0 million based on sure Arden revenues received by Zeus inside the three months following completion of the Disposal. The Disposal proceeds will be utilized to the Group’s working capital requirements.
The disposal is subject, inter alia, to the approval of the Financial Conduct Authority (FCA) to the change of management of Arden in accordance with part 185 of FSMA and approval from Ince’s principal lending bank.
Following the recent changes in management, the Disposal forms a half of Ince’s technique to re-focus on its core authorized services enterprise and to dispose of companies that aren’t closely aligned to that strategy.
In addition, the Board of Ince continues to implement a variety of changes in line with its beforehand introduced cost rationalisation programme and growth strategy, particularly in light of prevailing market and financial conditions.
Following its acquisition by Ince in April 2022, Arden Partners noticed good retention ranges amongst its broking clients. However, the recent macro-economic headwinds skilled by the capital markets in London have delayed a considerable a half of Arden’s transaction pipeline into early subsequent year and beyond.
In addition, the persevering with pressure on revenues and working margins inside the small cap broking sector has elevated the requirement for funding and scale in Arden’s business, at a time when Ince is least able to make such a commitment.
The most up-to-date audited annual outcomes of Arden for the year to 31 October 2021 present revenues of £9.28 million and a revenue earlier than taxation of £0.85 million, with net assets at 31 October 2021 of £5.76 million. Since then the Arden Partners revenues for the present monetary year to date have declined significantly. This decline is largely attributed to the more and more difficult fundraising market and wider financial conditions inside the UK since early 2022.
As a result Arden is currently loss making and the alternatives and advantages that were recognized by Ince on the time of the acquisition of Arden are now not anticipated to be achievable for the Group, given its present resources. The Disposal permits Ince to pay attention its funding and resources on its core authorized services business, the place the Ince Board believes there are a variety of significant growth opportunities.
Zeus Group is a monetary services group working throughout private and non-private capital markets inside the UK, with core services of Investment Banking, Equity Sales, Research and Trading, and Investment Management. Arden is a company adviser and multi-service stockbroker and the Disposal will enlarge Zeus’ client base and gross sales and buying and selling capabilities, in addition to deepening its sectoral expertise.
It will additionally add a market making functionality and a brand new sector specialism in oil and gas. It is therefore anticipated that Arden will be higher positioned to weather, and take benefit of alternatives arising from, the persevering with uncertainties in London’s small cap equities markets by becoming a member of a bigger London broking firm, which will additionally revenue Arden’s employees and clients.
Completion of the Disposal is conditional on the receipt of FCA approval of the change of management of Arden, approval of the Group’s principal lending financial institution and no materials adverse occasion occurring previous to completion. The share buy settlement for the Disposal contains particular indemnities in respect of sure issues associated to Arden and warranties customary for a transaction of this nature, in every case from Ince in favour of Zeus.
Donnie Brown, CEO of Ince, commented: “In difficult market and financial conditions, the disposal of Arden will allow Ince to focus its resources on its core authorized enterprise the place there are increasing opportunities. It additionally advantages Arden whose clients and employees will become a half of a a lot bigger enterprise that’s well positioned inside the London fairness markets. We proceed with our re-focused technique for growth and cost rationalisation which is already achieving positive results”.