Alliance Trust buys stockbroker for £14m

Alliance Trust buys stockbroker for £14m

Alliance Trust Savings has entered into an agreement with Brewin Dolphin to acquire its execution-only stockbroking business, Stocktrade, for £14m.

The deal will add more than 48,000 new customers and £4.6bn of new assets into Alliance Trust Savings across direct customers, intermediary customers and strategic partnerships.

According to bosses the deal should transform ATS’s current break-even profitability into meaningful profit in 2016 prior to integration costs.

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They added the deal should enable ATS to drive further economies of scale as both businesses offer similar products and services to a complementary customer base.

Alliance Trust Savings will fund the acquisition price and additional associated regulatory capital of up to £8m in cash via an injection of equity from its parent, Alliance Trust Plc. The deal should be completed towards the end of the third quarter of 2015.

As part of the transaction, Graham Swan and Nicholas Pearson, the divisional directors responsible for Stocktrade, will stay with the business in senior management roles. The existing Stocktrade team in Edinburgh will be transferring across to ATS upon completion.

Patrick Mill, managing director of ATS, said: “We are really excited about this acquisition. It demonstrates ATS’ commitment to our ambitious growth strategy by extending our impact and adding value for the long term, with immediate effect.

“Our proposition, trusted brand, high levels of customer service and ability to respond to changing customer needs have enabled us to grow our business profitably. Already this year we’ve grown assets organically by 12 per cent.”

David Nicol, chief executive of Brewin Dolphin, added: “The sale of Stocktrade is a good result for shareholders, customers and colleagues.

“It is consistent with our strategy of streamlining and simplifying our business and will further enhance shareholder value by allowing us to continue to focus on growing our core wealth management service.”