REG - abrdn PLC - Acquisition

AberdeenAnnouncement

02/12/2021 10:45

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RNS Number : 3704U  abrdn PLC  02 December 2021

2 December 2021

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OR FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF THAT JURISDICTION

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

FOR IMMEDIATE RELEASE

abrdn plc ("abrdn")

Proposed acquisition of interactive investor Limited

abrdn announces plans to acquire 100 per cent. of the UK's leading
subscription-based investment platform interactive investor for £1.49
billion. abrdn and interactive investor have a shared vision of the growth and
development of the wealth market and a commitment to being the customer
champion. This acquisition will significantly enhance our presence and growth
opportunities within a fast-growing and attractive market.

Stephen Bird, Chief Executive Officer of abrdn plc commented:

"This is a unique opportunity and a transformative step in delivering our
growth strategy. interactive investor is the UK's number one
subscription-based investing platform with a powerful reputation as a consumer
champion. abrdn's scale, resources, and shared vision will enable interactive
investor to grow confidently and expand its leadership position in the UK's
attractive savings and wealth market. I am delighted that Richard Wilson and
his team will continue to lead interactive investor."

Richard Wilson, Chief Executive Officer of interactive investor Limited
commented:

 "This is an exciting new chapter in our history and means that we can focus
exclusively on serving those who matter most: our customers. We will have
access to abrdn's additional capabilities across research, advice and wealth
management services, and we will benefit from being part of one of Europe's
largest investment and wealth management firms, with a vision and values
closely aligned to our own.

Our management will remain the same, and the same extraordinary team will
continually develop our service and technology, while maintaining our
subscription pricing, our whole of market choice and the same campaigning
spirit and editorial independence."

 

·      abrdn has agreed to acquire 100 per cent. of the ordinary share
capital of the holding company of interactive investor Limited ("interactive
investor") from its shareholders, including J.C. Flowers IV L.P. (a fund
advised by J.C. Flowers & Co.) and key members of interactive investor's
management, for total consideration of £1.49 billion 1  (#_ftn1) .

 

·      Completion of the Acquisition is subject to the satisfaction of
customary conditions including regulatory consents and abrdn Shareholder
approval.

 

·      interactive investor is the leading subscription-based
platform(( 2  (#_ftn2) )) within the high-growth UK direct investing market,
with over 400,000 customers(( 3  (#_ftn3) )) and AUA of approximately £55
billion(( 4  (#_ftn4) )). The UK direct investing market benefits from
accelerating demographic and structural market trends. In combination, the
high-tech, high-touch models of interactive investor and abrdn can enable
clients to become better investors and create more opportunities for their
financially secure futures.

 

·      The Acquisition is a material step in our building of a
leadership position in the personal wealth market, with AUMA in the Personal
vector increasing nearly fivefold to £69 billion 5  (#_ftn5) on a pro forma
basis.

 

·      abrdn considers the investment choices, flexibility and fixed fee
pricing model that interactive investor offers customers, and its ethos as a
consumer champion, to positively differentiate it in the market. abrdn is
therefore committed to interactive investor's standalone open-architecture,
subscription-based revenue model for the long-term.

 

·      As part of the Acquisition, Richard Wilson, CEO of interactive
investor will join abrdn and continue to lead interactive investor, which will
operate as a standalone business within abrdn's Personal vector.

 

·      interactive investor has grown rapidly, attracting high-value
customers and is expected to continue to deliver a strong profile of growth
and efficiency. The Acquisition is expected to be double-digit earnings
accretive 6  (#_ftn6) in the first full financial year following Completion.

 

·      The Acquisition will be funded in cash from abrdn's capital
resources. Following the Acquisition, abrdn's capital position will remain
strong with an indicative pro forma regulatory capital surplus (post IFPR) of
c.£0.5 billion and in addition c.£2.5 billion of value from our listed
investments 7  (#_ftn7) . We intend to issue Additional Tier 1 debt of c.£200
million to optimise our capital structure.

 

 

Strategic rationale for the Acquisition

Acquisition achieves scale in the high-growth direct investing market,
accessing new customer segments and capabilities

·      Growing our Personal vector and expanding its capabilities and
scale is a clear strategic priority for abrdn. The current focus of our
Personal vector on financial planning and discretionary investment management
will be transformed by combining with the high-tech model of interactive
investor enabling us to meet clients' financial needs throughout their lives.
Following the Acquisition, our Personal vector will have £69 billion of
AUMA 8  (#_ftn8) on a pro forma basis and the share of abrdn Group fee based
revenue 9  (#_ftn9) from Personal will increase from 6 per cent. 10  (#_ftn10)
to 13 per cent. 11  (#_ftn11)

 

·      The direct investing market has grown at c.15 per cent. 12 
(#_ftn12) compound historically and is expected to continue growing at a
similar rate in the future driven by accelerating demographic and structural
market trends. These include the democratisation of wealth, increased
digitalisation of services, better value for money propositions, substantial
inter-generational wealth transfers and the growing importance of a dynamic
offering to address changing client behaviours and needs over time.

 

interactive investor is the UK's leading subscription-based direct investing
platform and consumer champion

·      interactive investor is the leading subscription-based direct
investing platform in the UK, with over 400,000 customers, and a meaningful
proportion of high-value customers based on AUA per customer. Its
open-architecture, digitally-enabled, data-centric model and technology
platform drives strong customer engagement, activity and acquisition, through
data analytics, customer personalisation and high user functionality.

 

·      This has enabled interactive investor to build growth momentum,
with net flows of £5.5 billion(( 13  (#_ftn13) )), c.17 per cent. of opening
AUA, and increasing trading volumes of c.21,700 daily average retail trades
over the twelve month period to 30 June 2021, which compares to c.8,700 over
the twelve month period to 31 December 2019. Total AUA has increased 55 per
cent. compound over the period between 31 December 2018 to 30 June 2021.

 

·      interactive investor is focused on continuing to deliver enhanced
user experience for its customers following the successful roll out of a new
mobile app and website and, most recently, the launch of 'Friends and Family',
where existing customers can introduce multiple friends or family for only £5
per month.

 

·      interactive investor's platform is scalable with a large
proportion of efficient straight-through processing, which allows significant
scaling in customer numbers and activity. Strong operating leverage in the
business has resulted in an improving margin 14  (#_ftn14) from 23 per cent.
(( 15  (#_ftn15) )) to 34 per cent.(( 16  (#_ftn16) )).

 

Transforms our Personal vector, significantly growing and diversifying revenue
and profitability

·      Following the Acquisition, abrdn's Personal vector will have
scale and relevance, with fee based revenue more than doubling from £83
million(( 17  (#_ftn17) )) to £199 million(( 18  (#_ftn18) )) on a pro forma
basis. The vector's growth potential is expected to accelerate given the
trends supporting strong growth prospects for the personal wealth market and
direct investing specifically.

 

·      interactive investor's projected revenue growth complements
abrdn's high single digit revenue growth target (three year CAGR to 2023),
accelerating sustainable growth, and its operating margin is incremental to
abrdn's existing target to exit 2023 at a cost/income ratio of c.70 per cent.

 

·      The Acquisition significantly expands our addressable market and
creates a step change in our combined UK wealth offering. interactive investor
expands abrdn's client reach, adding over 400,000 customers, allowing us to
meet a broader range of client behaviours and needs.

 

Shared vision of a combined high-tech, high-touch model that meets clients'
financial needs throughout their lives

·      interactive investor aligns closely with abrdn's client-led
offering. Together with abrdn's established propositions in financial planning
and discretionary investment management, the combined offering provides
clients with trust, confidence and compelling value for clients at all stages
of their financial journeys.

 

·      interactive investor complements recently added new digital
capabilities, with Exo Investing, which allows easier investing for clients
through AI digital investing capabilities, and Finimize, which offers
digestible investing information and insights to a highly engaged investor
community.

 

·      interactive investor will be able to leverage abrdn's trust, deep
expertise in financial advice, meticulous research and global perspective. In
combination, interactive investor's high-tech model broadens abrdn's existing
personal wealth offerings, from self-directed investing to high-touch
financial planning and discretionary investment management.

 

Optimal deployment of our capital to drive sustainable growth, returns, scale
and shareholder value - the Acquisition is expected to be double-digit
earnings accretive 19  (#_ftn19)

·      The Acquisition creates a leading position for the Personal
vector in the high-growth UK savings market, and is expected to be
double-digit earnings accretive 20  (#_ftn20) in the first full financial year
following Completion.

 

·      The Acquisition will be funded in cash from abrdn's capital
resources. Following the Acquisition, abrdn's capital position will remain
strong with an indicative pro forma regulatory capital surplus (post IFPR) of
c.£0.5 billion and in addition c.£2.5 billion in value from our listed
investments 21  (#_ftn21) . We intend to issue Additional Tier 1 debt of
c.£200 million to optimise our capital structure.

 

·      The Acquisition improves abrdn's dividend cover. The Board
intends to maintain the total dividend at 14.6 pence per annum until it is
covered at least 1.5 times by adjusted capital generation, at which point the
Board will seek to grow the dividend in line with its assessment of the
underlying medium term growth in profitability.

 

Further information on interactive investor

interactive investor is the leading subscription-based, digitally enabled,
direct investing platform in the UK, founded in 1995. Its holding company is
controlled by a fund advised by J.C. Flowers & Co., a leading private
equity firm. interactive investor is the UK's largest fixed fee
subscription-based investing platform, with £55 billion of AUA and over
400,000 customers(( 22  (#_ftn22) )).

interactive investor has a strong track record of acquiring, integrating and
investing in complementary platform businesses. interactive investor completed
the acquisition of TD Direct Investing in 2017, Alliance Trust Savings in
2019, and Share plc in 2020. The latest acquisition was the EQi book of
customers, which completed in June 2021. interactive investor is based in
Manchester, with offices in London and Leeds, and has c.777 employees 23 
(#_ftn23) .

The interactive investor Group generated adjusted profit before tax of £45.5
million and reported profit before tax of £41.7 million for the year ended
2020 and had gross assets of £636 million as at 30 June 2021.

 

 

 

 

                                                        2018   2019   2020    LTM

June 2021
 Customers ('000s)                                      258    273    277     404
 Daily Average Retail Trades                            8,591  8,691  19,083  21,721

 AUA (as at period end, £ billion)                      18     32     38      55
 Net flows (£ billion)                                  0.9    1.7    4.3     5.5

 Revenue (£ million) 24  (#_ftn24)                      73.0   90.2   133.2   -
 Adjusted profit before tax (£ million) 25  (#_ftn25)   17.1   23.2   45.5    -

 

Key terms of the Acquisition

A summary of the key terms of the principal agreements in connection with the
Acquisition is set out in Appendix I to this announcement.

 

Transaction timetable and conditionality

The Acquisition is a Class 1 transaction for abrdn under the Listing Rules.
Accordingly, the approval of abrdn Shareholders is required and will be sought
at the General Meeting expected to take place in the first quarter of 2022.
The Circular containing the notice convening the General Meeting will be
published in due course. In addition, the Acquisition is subject to the
satisfaction of other conditions including receipt of regulatory and
anti-trust approvals.

The timing of the satisfaction of certain of the conditions to Completion is
uncertain given the involvement of third parties, including relevant
regulators, but it is currently expected that Completion will occur in the
second quarter of 2022.

 

Integration plan

abrdn intends to operate interactive investor as a standalone business within
its Personal vector, with its own management team and operational platform, to
ensure a continued high-quality service for both existing and future
customers. Richard Wilson, CEO of interactive investor, will join abrdn as
part of the Acquisition and lead interactive investor in its next phase of
growth under abrdn's ownership.

 

Analysts and investors

A presentation and Q&A session for analysts and investors will take place
at 12.00pm (GMT) on 2 December 2021 via conference call. To participate in the
call please dial:

 

United Kingdom 0800 640 6441

United Kingdom (Local) 020 3936 2999

All other locations +44 20 3936 2999

Access code: 574541

 

The presentation and Q&A session will be webcast live. Please go to
https://www.abrdn.com/corporate/investors/acquisition-of-ii
(https://www.abrdn.com/corporate/investors/acquisition-of-ii) to view the
webcast and to download the slides accompanying the presentation. The webcast
will also be made available for replay from 11.00am (GMT) on 3 December 2021.

 

Enquiries

 abrdn plc
 Media
 Stephen Whitehead                            07920 369595
 Iain Dey (Edelman Smithfield)                07976 295906
 Latika Shah (Edelman Smithfield              07950 671948
 Institutional equity investors and analysts
 Catherine Nash                               07798 518657
 Retail equity investors
 Equiniti                                     *0371 384 2464
 * Calls may be monitored and/or recorded. Call charges will vary.
 Debt investors and analysts
 Graeme McBirnie                              01313 727760
 Group Secretariat
 Kenneth Gilmour                              07734 974073

 J.P. Morgan Cazenove                         +44 (0) 20 7742 4000
 (Sole Financial Adviser)
 Conor Hillery
 Edward Squire
 Claire Brooksby
 Ravin Mehta

Important notice

This announcement is not intended to, and does not constitute, or form part
of, an offer to sell or an invitation to purchase or subscribe for any
securities or a solicitation of any vote or approval in any jurisdiction. This
announcement does not constitute a prospectus or a prospectus equivalent
document. abrdn Shareholders are advised to read carefully the formal
documentation in relation to the Acquisition once it has been despatched. Any
response to the proposals should be made only on the basis of the information
in the formal documentation to follow.

Overseas jurisdictions

The release, publication or distribution of this announcement in jurisdictions
other than the United Kingdom may be restricted by law and therefore any
persons who are subject to the laws of any jurisdiction other than the United
Kingdom should inform themselves about, and observe, any applicable
requirements. This announcement has been prepared for the purposes of
complying with the Listing Rules and the information disclosed may not be the
same as that which would have been disclosed if this announcement had been
prepared in accordance with the laws and regulations of any jurisdiction
outside of the United Kingdom.

 

Forward-looking statements

Certain statements in this announcement are, or may be deemed to be,
"forward-looking statements". Forward-looking statements are prospective in
nature and are not based on historical facts, but rather on current
expectations and projections of the management of abrdn and interactive
investor about future events, and are therefore subject to risks and
uncertainties which could cause actual results to differ materially from the
future results expressed or implied by the forward-looking statements. Each
forward-looking statement speaks only as of the date of the particular
statement, and the events discussed herein may not occur.

The forward-looking statements contained in this announcement include
statements relating to the expected effects of the Acquisition on abrdn and
interactive investor or the Enlarged Group (including their future prospects,
developments and strategies), the expected timing and scope of the Acquisition
and other statements other than historical facts. Often, but not always,
forward-looking statements can be identified by the use of forward-looking
words such as "plans", "expects" or "does not expect", "is expected", "is
subject to", "budget", "projects", "strategy", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or statements that certain actions,
events or results "may", "could", "should", "would", "might" or "will" be
taken, occur or be achieved. Although abrdn and interactive investor believe
that the expectations reflected in such forward-looking statements are
reasonable, abrdn and interactive investor can give no assurance that such
expectations will prove to be correct.

By their nature, forward-looking statements involve risk and uncertainty
because they are based on information available at the time they are made,
including current expectations and assumptions, and relate to future events
and/or depend on circumstances which may be or are beyond the abrdn Group's
control, including among other things: UK domestic and global political,
economic and business conditions (such as the UK's exit from the EU); market
related risks such as fluctuations in interest rates and exchange rates, and
the performance of financial markets generally; the impact of inflation and
deflation; the impact of competition; the timing, impact and other
uncertainties associated with future acquisitions, disposals or combinations
undertaken by abrdn or its affiliates and/or within relevant industries; the
value of and earnings from the abrdn Group's strategic investments and ongoing
commercial relationships; default by counterparties; information technology or
data security breaches (including the abrdn Group being subject to
cyberattacks); operational information technology risks, including the abrdn
Group's operations being highly dependent on its information technology
systems (both internal and outsourced); natural or man made catastrophic
events; the impact of pandemics, such as the COVID-19 (coronavirus) outbreak;
climate change and a transition to a low carbon economy (including the risk
that the abrdn Group may not achieve its targets); exposure to third party
risks including as a result of outsourcing; the failure to attract or retain
necessary key personnel; the policies and actions of regulatory authorities;
and the impact of changes in capital, solvency or accounting standards, and
tax and other legislation and regulations in the jurisdictions in which abrdn
and its affiliates operate.

Neither abrdn and interactive investor, nor any of their respective associates
or directors, officers or advisers, provides any representation, assurance or
guarantee that the occurrence of the events expressed or implied in any
forward-looking statements in this announcement will actually occur. You are
cautioned not to place any reliance on these forward-looking statements. Other
than in accordance with their legal or regulatory obligations, neither abrdn
nor interactive investor is under any obligation, and abrdn and interactive
investor expressly disclaim any intention or obligation, to update or revise
any forward-looking statements, whether as a result of new information, future
events or otherwise.

No profit forecasts, estimates or quantified financial benefits statements

No statement in this announcement is intended as a profit forecast, profit
estimate or quantified financial benefits statement for any period and no
statement in this announcement should be interpreted to mean that earnings or
earnings per share for the Enlarged Group, abrdn and/or interactive investor
for the current or future financial years would necessarily match or exceed
the historical published earnings or earnings per share of abrdn or
interactive investor.

Rounding

Certain figures included in this announcement have been subjected to rounding
adjustments. Accordingly, figures shown for the same category presented in
different tables may vary slightly and figures shown as totals in certain
tables may not be an arithmetic aggregation of figures that precede them.

Currency

Unless otherwise indicated, all references in this document, to "sterling",
"pounds sterling", "GBP" and "£" are to the lawful currency of the United
Kingdom. abrdn prepares its financial statements in pounds sterling.

Disclaimer

J.P. Morgan Securities plc, which conducts its UK investment banking business
as J.P. Morgan Cazenove ("J.P. Morgan Cazenove"), and which is authorised in
the United Kingdom by the Prudential Regulation Authority (the "PRA") and
regulated by the PRA and the FCA, is acting as financial adviser exclusively
for abrdn and no one else in connection with the Acquisition and will not
regard any other person as its client in relation to the Acquisition and will
not be responsible to anyone other than interactive investor for providing the
protections afforded to clients of J.P. Morgan Cazenove or its affiliates, nor
for providing advice in relation to the Acquisition or any other matter or
arrangement referred to herein.

LEI number of abrdn plc: 0TMBS544NMO7GLCE7H90

 

APPENDIX I

PRINCIPAL TERMS OF THE ACQUISITION

Principal agreements in connection with the Acquisition

SPA

interactive investor is the holding company of the interactive investor Group.
Currently, c.95.2 per cent. of interactive investor's shares are held by
Antler Holdco Limited ("Antler"), a Guernsey-incorporated company controlled
by J.C. Flowers IV L.P. (the "J.C. Flowers Fund").

 

On 2 December 2021, abrdn and the Initial Sellers entered into the SPA to give
effect to the Acquisition. The Initial Sellers include the J.C. Flowers Fund,
MMC and key members of interactive investor's management team, Richard Wilson
(Chief Executive Officer), Barry Bicknell (Chief Finance Officer), John
Tumilty (Chief Technology Officer) and Gary Shaw (Director of Operations)
(together, the "Management Sellers"). The Initial Sellers own the majority of
the issued share capital in Antler.

 

Pursuant to the SPA, the Initial Sellers have agreed to sell their shares in
Antler to abrdn. After the signing of the SPA and before Completion: (i) the
Management Sellers have agreed to take certain steps (and the J.C. Flowers
Fund and MMC have agreed, if necessary, to invoke their drag rights) to
transfer the shares of the other Antler shareholders to abrdn; and (ii) J.C.
Flowers and the Management Sellers have agreed to procure that Antler takes
certain steps (including, if necessary, by invoking its drag rights) to
transfer the c.4.8 per cent. of the shares of interactive investor held by
minority shareholders to Antler.

 

Consideration

The purchase price for 100 per cent. of the Antler shares and all of the c.4.8
per cent. minority shares in interactive investor is £1.49 billion in cash.
The purchase price is subject to: (i) a locked box adjustment from 30
September 2021; and (ii) a regulatory capital adjustment, which is equal to
two times the difference between the actual minimum regulatory capital
requirement as at 31 March 2022 and £48 million. The maximum regulatory
capital adjustment (in either direction) will be £20 million. As a result,
the total deal consideration will be in the range of £1.47 billion to £1.51
billion.

 

Antler has outstanding discount notes in issue, which will be redeemed at
Completion. The redemption amount will be funded by abrdn and will be deducted
from the purchase price to be paid by abrdn at Completion.

 

Conditions and break fee

Completion under the SPA is subject to the satisfaction of certain customary
conditions, including: the approval of the Acquisition by abrdn Shareholders
at the General Meeting to be convened pursuant to the notice of meeting to be
set out in the Circular (the "Shareholder Approval Condition"); the approval
of the FCA and the Competition and Markets Authority; and certain material
adverse events not having occurred in respect of the interactive investor
Group by Completion.

 

The SPA requires that abrdn ensures that its directors provide a unanimous
recommendation to its shareholders to approve the Acquisition. This obligation
is subject to a carve-out allowing the directors not to provide such
recommendation (or to withdraw such recommendation once made) if required by
the directors' fiduciary duties. However, if the Shareholder Approval
Condition has not been satisfied by the longstop date in circumstances where
the directors have exercised their right to withhold or withdraw their
recommendation of the Acquisition to its shareholders, abrdn would be required
to pay a break fee of £7.5 million in cash to the Initial Sellers.

 

Warranties, and warranty and indemnity insurance

The SPA contains title and capacity warranties. The liability of the Initial
Sellers for any breach of warranty under the SPA is subject to customary
limitations and exclusions.

 

The Management Warrantors have agreed to give fundamental and business
warranties under a separate Management Warranty Deed. The Management
Warrantors' liability for any breach of these warranties is limited by (among
other things) an aggregate financial cap of £1, which is customary for deals
with warranty and indemnity insurance.

 

The warranties under the Management Warranty Deed and the SPA are backed by
warranty and indemnity insurance. The liability of the insurers under the
warranty and indemnity insurance is subject to further limitations and
exclusions in addition to those contained in the Management Warranty Deed and
the SPA. In particular, there is an overall cap on liability of £375 million.

 

 

 

APPENDIX II

SOURCES OF INFORMATION AND BASES OF CALCULATION

In this Announcement, unless otherwise stated:

·      All financial information presented other than financial
information in respect of the abrdn Group, reflects reported results for
interactive investor, which is the holding company of the interactive investor
Group. Currently, c.95.2 per cent. of interactive investor's shares are held
by Antler;

 

·      Information on net flows, revenue, expenses and adjusted profit
before tax with respect to the years ended 31 December 2018 - 2020 relating to
interactive investor is from audited financial accounts at the time of this
announcement;

 

·      Information on customers, daily average retail trades and AUA
with respect to the years ended 31 December 2018 - 2020 relating to
interactive investor is from unaudited management accounts at the time of this
announcement;

 

·      Information on customers, net flows and AUA is in relation to
customers, net flows and AUA on the interactive investor platform; and

 

·      Information with respect to the 12 months ended 30 June 2021
relating to interactive investor is from unaudited management accounts at the
time of this announcement.

 

 

 

 

APPENDIX III

DEFINITIONS

 "abrdn"                           abrdn plc or the abrdn Group, in each case as the context may require;
 "abrdn Group"                     abrdn plc and its subsidiaries and subsidiary undertakings from time to time,
                                   and where the context permits, each of them;
 "abrdn Shareholder(s)"            holders of the shares in abrdn;
 "Acquisition"                     the proposed acquisition of interactive investor by abrdn, as effected by the
                                   transaction structuring described in Appendix I;
 "Antler"                          Antler Holdco Limited;
 "AUA"                             assets under administration;
 "AUMA"                            assets under management and administration;
 "Circular"                        the circular to be issued by abrdn setting out further details of the
                                   Acquisition and containing a notice convening the General Meeting;
 "Completion"                      completion of the Acquisition;
 "Enlarged Group"                  the enlarged group of companies which will, following Completion, comprise the
                                   abrdn Group, Antler and the interactive investor Group;
 "Exceptional Items"               items of income or expenditure that are significant in size and which are not
                                   expected to repeat over the short to medium term;
 "FCA"                             the Financial Conduct Authority;
 "General Meeting"                 the general meeting of shareholders of abrdn to be convened to approve the
                                   Acquisition;
 "IFPR"                            the Investment Firms Prudential Regime
 "Initial Sellers"                 the J.C. Flowers Fund, MMC, and other investors, together with the Management
                                   Sellers;
 "interactive investor"            interactive investor Limited;
 "interactive investor Group"      Interactive investor and its subsidiaries and subsidiary undertakings from
                                   time to time and where the context permits, each of them;
 "J.C. Flowers & Co."              J.C. Flowers & Co;
 "J.C. Flowers Fund"               J.C. Flowers IV L.P.;
 "J.P. Morgan Cazenove"            J.P. Morgan Securities plc, which conducts its UK investment banking business
                                   as J.P. Morgan Cazenove;
 "Listing Rules"                   the listing rules, made by the Financial Conduct Authority under Part 6 of the
                                   Financial Services and Markets Act 2000, as amended from time to time;
 "Management Sellers"              Richard Wilson, Barry Bicknell, John Tumilty and Gary Shaw;
 "Management Warrantors"           Richard Wilson, Barry Bicknell, Chris Horner, Gary Shaw, John Tumilty and
                                   Libby Jones
 "Management Warranty Deed"        the management warranty deed entered into between abrdn and the Management
                                   Warrantors on 2 December 2021;
 "MMC"                             means, collectively, MMC GP Scale-Up I LLP, MMC Scale-Up Fund 2019 LP and
                                   Mainspring Nominees (2) Limited;
 "PRA"                             the Prudential Regulation Authority;
 "Shareholder Approval Condition"  the approval of the Acquisition by abrdn Shareholders at the General Meeting
                                   to be convened pursuant to the notice of meeting to be set out in the
                                   Circular; and
 "SPA"                             the sale and purchase agreement entered into between abrdn and the Initial
                                   Sellers and Antler on 2 December 2021.

 

 1  (#_ftnref1) Subject to a locked box adjustment and a regulatory capital
adjustment

 2  (#_ftnref2) Second largest direct investing platform by AUA, as at 30 June
2021

 3  (#_ftnref3) As at 30 June 2021

 4  (#_ftnref4) As at 30 June 2021

 5  (#_ftnref5) As at 30 June 2021

 6  (#_ftnref6) In percentage terms

 7  (#_ftnref7) As at 30 September 2021

 8  (#_ftnref8) As at 30 June 2021

 9  (#_ftnref9) Fee based revenue for interactive investor is revenue net of
cost of sales, and comparable to the fee based alternative performance measure
used by abrdn

 10  (#_ftnref10) Last twelve months to 30 June 2021

 11  (#_ftnref11) Last twelve months to 30 June 2021 for abrdn, and twelve
months to 31 December 2020 for interactive investor

 12  (#_ftnref12) Fundscape, D2C channel assets. Refers to period between 30
June 2015 to 30 June 2021

 13  (#_ftnref13) Last twelve months to 30 June 2021

 14  (#_ftnref14) Profit before Exceptional Items, amortisation of acquisition
intangibles and tax. Includes £4.7 million of other income

 15  (#_ftnref15)  Twelve months to 31 December 2018

 16  (#_ftnref16) Twelve months to 31 December 2020

 17  (#_ftnref17) Last twelve months to 30 June 2021

 18  (#_ftnref18)  Last twelve months to 30 June 2021 for abrdn, and twelve
months to 31 December 2020 for interactive investor

 19  (#_ftnref19) In percentage terms

 20  (#_ftnref20) In percentage terms

 21  (#_ftnref21) As at 30 September 2021

 22  (#_ftnref22) As at 30 June 2021

 23  (#_ftnref23) As at 30 June 2021, refers to FTEs, excluding The Share
Centre FTEs

 24  (#_ftnref24)  Revenue is gross of cost of sales

 25  (#_ftnref25) Adjusted profit before tax refers to profit before
Exceptional Items, amortisation of acquisition intangibles and tax. FY 2020
includes £4.7 million of other income

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