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Caledonia Investments buys 94% stake in 7IM

Caledonia Investments buys 94% stake in 7IM

Caledonia Investments has agreed to acquire a 94 per cent stake in Seven Investment Management in a deal which valued the firm at £100m.

The deal is subject to regulatory approval, and Caledonia Investments, a £1.6bn listed investment trust, will invest £77m in cash to acquire 94 per cent of the company from its current owners Zurich and Aegon.

According to the London stock exchange, Caledonia’s current share price is £24.20, a jump of 0.62 per cent on Friday’s (19 June) close.

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For the remaining equity, the management team at Seven Investment Management will subscribe £5m.

The balance of the purchase costs is to be provided by £25m of bank debt.

This news follows reports earlier in the year that the two companies, Zurich and Aegon had hired Evercore and at that time, according to FTAdviser sister publication the Financial Times, were looking to explore a potential sale of the business.

At that time, Justin Urquhart Stewart, a co-founder of Seven Investment Management, said he would not want to return to the ethic of a large corporation as rumours have started that its external shareholders are looking to sell.

Tom Sheridan, chief executive officer at Seven Investment Management, said in a note for clients: “We would like to acknowledge that Zurich and Aegon were very helpful in bringing 7IM management together with its preferred partner.

“And we should also acknowledge that the returns Zurich and Aegon made as shareholders were above the targets they set in 2007. So customers, staff and shareholders have all been treated fairly. We did the right thing for, and with, all stakeholders.”

“As you know, we believe in long term investment management, and we believe in independence. We have worked very hard to create an ongoing environment that is suited to our beliefs, and we are truly delighted with the result.”

ruth.gillbe@ft.com