Caledonia Investments solicits bids for $585 mln wealth manager 7IM -sources
12/07/2023 18:53
By Pablo Mayo Cerqueiro and Amy-Jo Crowley
LONDON, July 12 (Reuters) - Caledonia Investments
CLDN.L has given prospective buyers until the end of the month
to table indicative offers for wealth manager 7IM, two people
familiar with the matter told Reuters, in the latest chapter of
consolidation in Britain's money management industry.
U.S. investment bank Evercore EVR.N distributed marketing
materials among prospective buyers in the last two weeks,
kicking off a much-anticipated sale of 7IM, which oversees
billions of pounds in investments by British savers, said the
people, who spoke on condition of anonymity.
Sources provided valuation estimates for 7IM ranging from
around 400 to 450 million pounds ($584.60 million) including
debt, based on expected earnings before interest, tax,
depreciation and amortisation (EBITDA) of roughly 30 million
pounds.
Caledonia, 7IM and Evercore declined to comment.
The sale process is largely aimed at private equity firms
interested in acquiring a slice of Britain's wealth management
market, the people said.
Unlike continental Europe where investment products are
largely distributed through banks, the UK has a vast network of
investment advisory shops that help customers manage their
money.
Buyout groups have spotted an opportunity to roll up those
advisers, as well as their technology suppliers, with a view to
selling them to a competitor or taking them to the stock market.
Caledonia, a self-managed investment trust, acquired 7IM in
2015 from insurers Zurich Insurance Group ZURN.S and Aegon NV
AEGN.AS .
The company has since grown under Caledonia's ownership,
sparking takeover interest along the way.
Sky News reported in April that private equity firm
Inflexion was preparing to bid for 7IM once the company came on
the block.
Last year, it reported that rival wealth manager Brooks
MacDonald BRK.L had made a failed takeover approach.
However, rocketing interest rates may pose challenges for
the wealth management industry, a third person said, if they
prompt savers to redeem their investments to pay down mortgages
or move their funds into cost-free savings accounts.
($1 = 0.7698 pounds)
(Reporting by Pablo Mayo Cerqueiro and Amy-Jo Crowley in
London; Editing by John O'Donnell and Chizu Nomiyama)
((Pablo.MayoCerqueiro@thomsonreuters.com;))