REG - Investacc Group Ltd. - Acquisition and Announcement of Results Date

InvestAccAnnouncement

27/03/2025 07:15

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RNS Number : 3928C  Investacc Group Limited  27 March 2025

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

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LEI: 2549008KZ7HM27V4O637

27 March 2025

InvestAcc Group Limited

Acquisition of AJ Bell's Platinum SIPP and SSAS business

and

Announcement of Results Date

InvestAcc announces the second acquisition of its buy and build strategy with
AJ Bell's Platinum SIPP and SSAS business, strengthening its position as a
market leader in "Full" SIPP pension administration

InvestAcc Group Limited ("InvestAcc", the "Company" or, together with its
subsidiaries, the "Group"), a leading UK specialist pension administrator, is
pleased to announce that it has agreed to acquire AJ Bell's Platinum SIPP and
SSAS business (the "Acquisition"), the pension administration client books
which form part of the AJ Bell non-platform business, for a maximum
consideration of £25m.

The transaction is expected to complete in the second half of 2025 following
the extraction, migration and integration of the Platinum SIPP and SSAS
clients onto InvestAcc's platform ("Completion").

In addition, the Company expects to announce its results for the six months
ended 31 December 2024 on 24 April 2025.

Mark Hodges, Executive Chairman of InvestAcc Group, commented: "We are
thrilled to announce the acquisition of the Platinum SIPP and SSAS businesses
from AJ Bell. The Acquisition's high-net-worth client base, exceptional
service proposition and strong financial performance make it a perfect
strategic fit for InvestAcc. This significantly strengthens our position as a
market leader in "Full" SIPP pension administration, allowing us to enhance
our service offering while maintaining the highest standards of customer
experience. This represents the second acquisition of a wider pipeline of both
company and client book extraction opportunities under active review.

We look forward to collaborating with AJ Bell to ensure a seamless migration
and integration of the Platinum SIPP and SSAS clients to our platform and to
presenting the Acquisition opportunity as part our investor roadshow following
the publication of our accounts in April."

Michael Summersgill, Chief Executive Officer of AJ Bell, commented: "AJ Bell
Platinum customers will continue to receive great service as part of
InvestAcc, an award-winning provider of bespoke SIPP and SSAS services, with a
track record of delivering excellent customer service."

Background to AJ Bell's Platinum SIPP and SSAS business

The Platinum SIPP and SSAS business provides bespoke, high-quality pensions
expertise and SIPP and SSAS administration to the high net worth ("HNW")
segment. The business has Assets under Administration ("AuA") of £3.2bn
across 3,562 accounts 1 , and a HNW client base reflected through average SIPP
account size of approximately £670k. The Acquisition generated £10m revenue
in FY24 (September year-end) of which 92% of revenues were recurring,
underpinned by fixed annual fees with inflation linked fee increases.

Strategic Rationale and Financial Impact

Strengthens Market Position

·    The Acquisition consolidates InvestAcc's market position in "Full"
SIPP administration, driving Group AuA to over £8.5bn across 16,000 SIPP
& SSAS accounts.

·    It also enhances InvestAcc's existing relationships with financial
advisers and wealth managers through expansion of product offering, as well as
broadening overall advisor relationship market coverage.

Significant Growth Potential

·      The Acquisition's Platinum SIPP and SSAS products are not
actively marketed. This provides a significant opportunity to re-open
marketing channels and leverage the Acquisition's large network of financial
advisers and wealth managers.

·      48% of the Acquisition's SIPPs are unadvised, an underserved
segment that provides additional opportunities to offer ancillary services to
improve client service and outcomes.

Positive Financial Impact

·      A comprehensive integration plan is in place to ensure business
continuity for existing clients, led by the Group's experienced in-house
integration team. The Acquisition will be integrated onto and leverage
InvestAcc's operating platform and infrastructure.

·      Management anticipate the Acquisition's trading EBITDA margin
will be in line with the performance of existing InvestAcc operations
following integration, with an expected cost to deliver of £2.8m.

Consideration Structure

The consideration of up to £25.0m will be satisfied as follows:

·    £18.5m consideration comprising £17.5m in cash and £1.0m in new
InvestAcc ordinary shares issued to AJ Bell on Completion;

·    Up to £6.5m deferred cash consideration expected to be paid in the
first 6 months of 2026, subject to the achievement of specific client transfer
targets to protect the Group against client lapses during the migration
process.

 

New Acquisition Facilities

Following an extensive process advised by Rothschild & Co, the Group also
announces that a £25.0m committed acquisition facility (the "Facility") has
been secured from Kartesia. The Facility will be used to finance the
Acquisition, with further ability to scale and support the wider Group
acquisition strategy in future.

Following the Acquisition announcement and the signing of the Business
Purchase Agreement, £5.0m of the Facility will be drawn for Acquisition fees
and to support the costs associated with the extraction, migration and
integration of the Platinum SIPP and SSAS clients ahead of Completion.

The initial interest rate margin of 6.75% p.a. is subject to a leverage
ratchet following Completion. The Group maintains a cautious approach to
leverage; management expects net leverage to fall from c.2.5x on Completion to
below 2x for the year ended 31 December 2026, based on the Group's current
trading expectations and this Acquisition. The Group therefore expects the
interest rate margin to fall to 6.00% p.a. in 2026.

Marwyn Lock-Up Agreement

Marwyn, the largest shareholder in the Company, holding 59.8% of the Ordinary
Shares and the sole Sponsor Share, has reinforced its long-term commitment to
the Group and its strategy by entering into a three-year lock-up agreement.
Under this agreement, subject to limited exceptions, Marwyn has committed to
retain 12,400,000 Ordinary Shares, representing 25% of the Company's current
share capital, along with the only Sponsor Share. This reflects their
continued confidence in the Group's vision and future growth.

Enquiries

Company Secretary: + 44 (0) 207 004 2700

Antoinette Vanderpuije

Camarco (PR Adviser): + 44 (0) 203 757 4980

Ed Gascoigne-Pees / Louise Dolan

Panmure Liberum Limited (Corporate Broker): + 44 (0) 203 100 2000

Chris Clarke / Ed Thomas

Zeus Capital Limited (Corporate Broker): + 44 (0) 207 220 1666

Harry Ansell / Katy Mitchell

Related Party Disclosure

As preliminary steps to the Acquisition, the Company capitalised
a £6,150,911 loan owed to the Company by the Company's subsidiary, InvestAcc
(BVI) Limited ("the Subsidiary") (the "Loan Note") into equity in the
Subsidiary by way of a further capital contribution of £6,150,911 and
cancellation of the Loan Note and waived all accrued but unpaid interest on
the Loan Note (the "Interest Waiver").

 As a subsidiary of the Company, the Subsidiary is considered to be a related
party of the Company for the purposes of paragraph 7.3 of the Disclosure
Guidance and Transparency Rules ("DGTRs"). The Interest Waiver constitutes a
material related party transaction for the purposes of paragraph 7.3 of the
DGTRs. The Directors consider that, on the basis that the Interest Waiver is a
necessary preliminary step to completing the Acquisition, the Interest Waiver
is fair and reasonable from the perspective of the Company and its
shareholders not considered to be related parties of the Company within the
meaning of the DGTRs.

The person responsible for arranging the release of this announcement on
behalf of InvestAcc Group Limited is Will Self, CEO.

END

 

 

 1  as at 31 December 2024

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