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Listed wealth manager raises £2m for latest buyout

Listed wealth manager raises £2m for latest buyout

Listed wealth manager European Wealth is set to acquire financial planning business Greensnow, which trades under the name ISM Solutions, for a maximum consideration of £3m, as it announced a £2m raising of shares.

The aggregate maximum consideration for the proposed acquisition is £3m, of which 50 per cent is to be satisfied in cash and 50 per cent in new ordinary shares. The initial payment is £1.25m, with £625,000 to be paid in cash and £625,000 to be paid in new ordinary shares.

For the full year to 31 March 2015 ISM had turnover of £1.1m of which approximately 92 per cent was recurring income and profit before tax of £114,986. As at 31 March 2015, ISM had aggregate net assets of £29,000.

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To help fund the “strategic acquisition”, the wealth manager announced that it has raised £2m through a share offer. The firm placed 2,527,095 new ordinary shares with both new and existing shareholders at a price of 80 pence per share.

The placing price represents a discount of approximately 9.6 per cent to the closing price of 88.5p per ordinary share on 26 May 2015. The placing represents approximately 11.3 per cent of share capital.

Net of expenses, the placing is expected to raise approximately £1.9m, which will be used to invest in both organic and inorganic growth, including payment of elements of the initial consideration for the proposed acquisition.

John Morton, executive chairman of European Wealth, said: “The combined fundraising, introducing new and highly supportive institutional investors into our already strong shareholder base, together with our strategic acquisition of ISM Solutions, is evidence of the robust strategy of the European Wealth Group and the manner in which it is viewed by the outside world.

“The developments announced today give us the opportunity to move forward with our growth objectives both through acquisition and organic expansion.”

An extraordinary general meeting will be held at the registered office in Guernsey on 12 June.

Last week, the group saw its funds under management and full year revenue increase in 2014, as it edged closer to profit and almost halved the previous year’s pre-tax loss.

The 2014 results revealed a pre-tax losses of £203,000 - 46 per cent less than the 2013 figure of £378,000 - with negative earnings blamed on “ongoing investment into the development of the business”.

peter.walker@ft.com