REG - JTC PLC - Acquisition of Essential Fund Services, LLC

JTCAnnouncement

16/12/2021 07:00

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RNS Number : 8111V  JTC PLC  16 December 2021

16 December 2021

 

 

JTC PLC

(the "Company" and together with its subsidiaries "JTC" or the "Group")

 

Acquisition of Essential Fund Services, LLC ("EFS")

 

A bolt-on US fund services business with long established commercial links to
the recently acquired SALI Fund Services business that adds further scale in a
key growth market

 

JTC, the global professional services business, is pleased to announce the
acquisition of Essential Fund Services ("EFS"), headquartered in New York,
USA. EFS offers a broad range of services in the alternative assets space,
including accounting, reporting and administrative services to investment
partnerships and their investment managers. The consideration will be settled
via cash and JTC equity.

Background to EFS

EFS was co-founded in 2009 by the present Managing Member and sole owner,
Gerard M. Federici, who is a highly respected financial services professional
with over 25 years' industry experience.

EFS differentiates itself from competitors by providing a high level of
service to its investment manager clients, allowing them to focus more closely
on the investment process, knowing that critical administrative functions are
in the hands of skilled and experienced professionals.

Gerard Federici will continue to lead the business and all current EFS
employees will join JTC, becoming part of the Group's Institutional Client
Services (ICS) Division. The transaction is not subject to any regulatory
approvals and completes with immediate effect.

Strategic rationale

The acquisition of EFS is extremely complementary to JTC's recent acquisition
of SALI Fund Services. EFS is one of the leading independent providers of fund
accounting services to the Insurance Dedicated Fund ("IDF") market, where SALI
is the established market leader. Significant strategic benefits are
anticipated for both businesses as they become part of the same Group, with
the transaction enabling greater collaboration between the firms and a more
integrated offering for IDF clients more generally.

More broadly, EFS will enhance JTC's fund services presence in the US,
providing additional scale and growth opportunities that complement the
Company's expanding US footprint. EFS currently provides services to 45
clients across 110 investment partnerships and has approximately $5.5bn of
Assets under Administration ("AuA"). The wider client book, which is primarily
located in the Greater New York Region, provides further diversity to JTC's
ICS client base in the US and over time, these clients will have the
opportunity to benefit from the Group's global capabilities and offering.

The US is an important growth market for fund services, including alternative
asset classes. The prevalence of outsourcing for fund services is lower than
levels seen in Europe, offering opportunities for strong growth. EFS, with its
reputation for exceptional levels of client service, is well positioned to
capture new business with the backing of JTC's global platform and
capabilities.

Financial Benefits

In the financial year ending 31 December 2020, EFS delivered revenue of c.
$1.7m with an EBITDA margin in line with JTC's medium term guidance of 33% -
38%. The business has grown consistently over time and there are tangible
opportunities to accelerate the growth trajectory by capturing a greater share
of the IDF fund accounting market and through leveraging JTC's network and
capabilities, both in the US and internationally.

Nigel Le Quesne, CEO of JTC, said:

"The acquisition of EFS is another high quality addition to our strategically
important and fast-growing US business. Gerard and his team have a
demonstrable track record of delivering the highest levels of client service
and the existing relationship with SALI Fund Services will help to enable
further growth for both businesses as part of the Group. We are excited about
the future for EFS and extend a warm to welcome Gerard, his team and all of
the business' clients and partners."

Gerard M. Federici, Managing Member of EFS, said:

"I am delighted that EFS has the opportunity to become part of the JTC Group
and play a role in its ambitious plans for the US fund services market. We
share the same belief in the importance of exceptional client service and
through our established relationship with SALI Fund Services, we will very
much hit the ground running and look forward to accelerating our growth
story."

Issue of Equity and Voting Rights

Applications have been made to the Financial Conduct Authority ("FCA") and
London Stock Exchange plc (the "London Stock Exchange"), respectively, for
84,619 new ordinary shares of £0.01 each in the capital of the Company (the
"Shares"), being the share consideration due under the terms of the Securities
Purchase Agreement dated 15 December 2021 pursuant to which the Company has
acquired EFS, to be admitted to the premium listing segment of the Official
List of the FCA and to trading on the main market of the London Stock Exchange
("Admission"). It is expected that Admission will become effective and
dealings in the Shares will commence at 8.00am on 21 December 2021.

Following admission of the New Shares the Company will have 147,585,261
Ordinary Shares of £0.01 each in issue. There are no shares held in treasury.
Therefore, following admission of the New Shares the total number of voting
rights in the Company will be 147,585,261 (the "Voting Rights Figure"), and
this Voting Rights Figure may be used by Shareholders as the denominator for
the calculations by which they will determine if they are required to notify
their voting rights interest, or a change to that interest, in the Company
under the FCA's Disclosure Guidance and Transparency Rules.

Ends.

 

Enquiries:

 

JTC
PLC
+44 (0) 1534 700 000

Nigel Le Quesne, Chief Executive Officer

Martin Fotheringham, Chief Financial Officer

David Vieira, Chief Communications Officer

 

Camarco                                                                      +44
(0) 20 3757 4985

Geoffrey
Pelham-Lane

Monique Perks

Emily Shea-Simonds

 

 

About JTC

 

JTC is a publicly listed, global professional services business with deep
expertise in fund, corporate and private client services. Every JTC person is
an owner of the business and this fundamental part of our culture aligns us
with the best interests of all of our stakeholders. Our purpose is to maximise
potential and our success is built on service excellence, long-term
relationships and technology capabilities that drive efficiency and add
value.

 

 

www.jtcgroup.com (http://www.jtcgroup.com/)

 

 

Important Notices

The person arranging release of this announcement on behalf of JTC is David
Vieira (Chief Communications Officer).

 

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 other jurisdiction should inform
themselves about, and observe, any applicable requirements. This announcement
has been prepared for the purposes of complying with the Listing Rules and MAR
and the information disclosed may not be the same as that which would have
been prepared in accordance with the laws and regulation of any jurisdiction
outside of England.

 

This announcement contains forward looking statements. No forward-looking
statement is a guarantee of future performance and actual results or
performance or other financial condition could differ materially from those
contained in the forward-looking statements. These forward-looking statements
can be identified by the fact they do not relate only to historical or current
facts. They may contain words such as "may", "will", "seek", "continue",
"aim", "anticipate", "target", "projected", "expect", "estimate", "intend",
"plan", "goal", "believe", "achieve" or other words with similar meaning. By
their nature forward looking statements involve risk and uncertainty because
they relate to future events and circumstances. A number of these influences
and factors are outside of the Company's control. As a result, actual results
may differ materially from the plans, goals and expectations contained in this
announcement. Any forward-looking statements made in this announcement speak
only as of the date they are made. Except as required by the FCA or any
applicable law or regulation, the Company expressly disclaims any obligation
or undertaking to release publicly any updates or revisions to any
forward-looking statements contained in this announcement.

 

 

 

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