Gresham House is to almost double in size as the listed alternative asset management company acquires FIM, a specialist manager of physical assets.
Gresham intends to raise £15m in a new share placing to fund the acquisition. The total initial cost of the acquisition is £21m, comprising £11.2m in cash and £9.8m in loan notes. A further £4m is payable if certain performance targets are achieved.
The combined company will have assets of £1.5bn. The company will have five specialist alternative investment strategies: forestry, new energy, UK housing and infrastructure, private assets and strategic public equity.
Gresham House’s management said they expect the acquisition to deliver annual returns of 15 per cent, while the purchase price represents six times the earnings before interest, tax, depreciation and amortisation.
Anthony Dalwood, chief executive of Gresham House, said: “The acquisition of FIM will allow Gresham House to achieve scale and establish a market leading position as an investor in UK commercial forestry whilst also enhancing the Gresham House New Energy division.
"Over the last three years, we have rapidly established Gresham House as a platform for growth for specialist asset management teams.
"The strategic rationale, alongside the potential financial returns, are clear and exciting for Gresham House shareholders.”
