Walker Crips Group Acquire Barker Poland Asset Management for GBP4.193m
Walker Crips Group plc (“Walker Crips” or “the Company”), the integrated financial services group, announced that it has purchased 100 per cent of the membership interests in BPAM (the “Acquisition”) from the members (the “Sellers”). The Acquisition has received approval from the Financial Conduct Authority.
BPAM is based in London and provides investment and wealth management services to a loyal and established base of private clients on a predominantly discretionary basis. As at 28 February 2015, BPAM’s assets under management (“AUM”) were £229 million, of which £192 million was discretionary-managed. Accordingly, BPAM’s revenue is almost entirely of a recurring nature. As a result of the Acquisition, Walker Crips is taking on a team of five advisers led by Managing Director, Geoff Wright, and the founder of the business, Pat Barker, who continues as Chairman of BPAM.
The Company has undergone a period of significant transition since the sale of its fund management division in April 2012 with a singular focus on expanding its core offering of investment and wealth management services. BPAM fits well with Walker Crips’ strategy and,apart from the opportunities for cost synergies, the addition of capable investment managers and their discretionary fee-based revenue streams provides a key step in achieving the additional scale needed to reach the Company’s medium-term target of £5 billion assets under management and administration (“AUMA”).
The consideration that the Company will pay for BPAM comprises a combination of cash, the value of BPAM’s net assets at completion of the Acquisition (“Completion”) and new ordinary shares in the Company (“Consideration Shares”) amounting in aggregate to a maximum of £4,193,900, which includes up to £265,000 in cash, an amount linked to the value of BPAM’s net assets on a pound-for-pound basis. As well as payment for net assets, the initial consideration comprises £1,728,900 in cash, together with the issue and allotment, credited as fully paid, of 440,771 Consideration Shares valued at the 5 day average closing price of theCompany’s Ordinary Shares prior to Completion. The Sellers have each agreed to lock-in and orderly market arrangements in relation to the Consideration Shares. Application will be made for the Consideration Shares to be admitted to the premium segment of the Official List of the UK Listing Authority and to trading on the London Stock Exchange’s main market for listed securities.
Dependent on the revenues achieved by the BPAM business, there may also be a deferred consideration payable by the Company over the next 3 years of up to an aggregate amount of £2 million, payable 90% in cash and 10% in new ordinary shares in the Company, subject to the continuation of current levels of revenue over the earn-out period. The full earn-out will be payable only if average annual revenues equal or exceed £1.6 million over the 3 year period following Completion. The cash element of both the initial and deferred consideration will be satisfied from the Company’s existing cash resources.