REG - Marwyn Value Inv Ltd - MAC II – acquisition of InvestAcc & MVI investment

Marwyn Value InvestorsAnnouncement

28/06/2024 16:15

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RNS Number : 4270U  Marwyn Value Investors Limited  28 June 2024

LEI: 213800L5751QTTVEA774

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN
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AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY
JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO

 

28 June 2024

This announcement contains Inside Information

 

Marwyn Value Investors Limited ("MVIL" or the "Company")

 

 Marwyn Acquisition Company II - acquisition of InvestAcc Group and follow-on
investment

 

The Company is pleased to announce that funds managed by Marwyn Investment
Management LLP have made an investment of £16.7 million into investee
company, Marwyn Acquisition Company II Limited ("MAC II") as part of MAC II's
£30m fundraise and acquisition of InvestAcc Group Limited, with £11.6m being
attributable to the Company's ordinary shares.

MAC II was founded by Marwyn and Mark Hodges with a focus on the UK wealth and
pensions market, and starting with this platform acquisition, is seeking to
build the UK's leading specialist pensions administration business with an
initial focus on the self-invested personal pension ("SIPP") and small
self-administered scheme ("SSAS") market.

Following the investment, MAC II is expected to represent c.21% of the
ordinary share Net Asset Value ("NAV"), contributing c.39p to the NAV/ordinary
share. Whilst the investment is expected to be effective on 4 July 2024, the
Company's NAV announcement for 28 June 2024 will include a pro-forma
look-through allocation to reflect the expected impact of the investment. The
Company continues to expect to pay quarterly dividends in August and November
2024.

MAC II's announcement of the acquisition and fundraise can be viewed here:

https://www.londonstockexchange.com/news-article/MAC2/acquisition-of-investacc-and-fundraising/16542601
(https://www.londonstockexchange.com/news-article/MAC2/acquisition-of-investacc-and-fundraising/16542601)

Robert Ware, Chairman of MVIL commented: "We are delighted by this enormously
exciting investment and the ongoing partnership with the MAC II team.
Alongside the excellent performance of both AdvancedAdvt and Zegona this year
and continued progression of the wider portfolio, this investment adds another
substantial asset to the Funds' investment portfolio with significant
potential to deliver material shareholder value."

Background to the investment

InvestAcc is an award-winning provider of SIPP and SASS services in the
UK. MAC II believes that InvestAcc provides the optimal strategic platform to
create value through a SIPP buy and build strategy. The business benefits from
being a leading UK personal pension administrator, having a proven track
record of delivering exceptional customer service, scalable operations and
infrastructure, a strong financial profile and a sustainable organic growth
trajectory. All of the management team, including the founder, are expected to
stay with the business post completion.

Strategic Rationale and market opportunity

 1.  InvestAcc is a highly scalable platform business: an award-winning provider of
     SIPP and SSAS services in the UK with a strong commitment to high quality
     customer service and outcomes. This is evidenced by their customer service
     score of 96%, winning best pension service provider four years running between
     2020 and 2023, and winning the best SIPP provider in 2023. The business
     provides the optimal strategic platform to create value, possessing scalable
     operations and infrastructure, a strong financial profile - generating £8.8
     million of revenue and £3.6 million of adjusted EBITDA for FY23 - and a
     sustainable organic growth trajectory. The transaction represents a unique
     opportunity to develop the UK's leading specialist pensions administration
     business with an initial focus on the SIPP Segment.
 2.  Long term structural market growth: favourable macroeconomic trends and the
     evolution of the pension industry have created a drive towards personal
     pensions (including SIPPs). The total SIPP market assets under administration
     are expected to grow at an 8% CAGR over the next 5-years from c.£500 billion
     to c.£750 billion.
 3.  Excellent underlying business fundamentals: full SIPP administrators typically
     have a customer retention rate of above 90%, creating an ongoing fee-based
     revenue stream. The average SIPP plan lasts for more than 25 years,
     benefitting from embedded growth through contractual inflation-linked fees.
     Industry average EBITDA margins exceed 30% with strong cashflow conversion.
 4.  Near term M&A consolidation opportunity with a robust pipeline: there is a
     highly attractive M&A landscape for acquiring "Full" SIPP and "Simple"
     SIPP administrators across a range of sellers. Regulatory pressure,
     underpinned by a push for higher levels of consumer duty care, as well as
     vendor needs, are driving the sector to actively consolidate. MAC II has a
     robust pipeline primarily sourced directly by the management team who are in
     active discussions in relation to five potential acquisitions with vendors
     which combined could deliver more than £20 billion of AuA and 45,000
     customers in 2024 and 2025.

 5.  A sector leading team with M&A track record: MAC II's management team have
     over 65 years of combined operational and strategic experience in the
     financial services and wealth sector, and have led multiple successful
     transactions. The MAC II management team are supported by Marwyn's M&A and
     capital markets expertise, who have a track record of successful public market
     fund raises, having raised over £3.9 billion to date across 12 comparable
     vehicles delivering £4.9 billion in gross equity profits for investors.

The acquisition is subject to the approval of the Financial Conduct Authority.

R Class Investment

Approximately £0.1 million of the Marwyn fund investment is attributable to
the 2021 Realisation shares of MVIL. As it is over 3 years since the creation
of the 2016 Realisation shares of MVIL, there is no allocation to the 2016
Realisation shares.

 

This announcement contains inside information for the purposes of Article 7 of
the UK version of EU Regulation 596/2014 which forms part of UK law by
virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"), and is
disclosed in accordance with the Company's obligations under MAR. The person
responsible for making this announcement is Robert Ware, Chairman, PO Box 309,
Ugland House, Grand Cayman, KY1-1104, Cayman Islands.

 

Company enquiries:

Marwyn Value Investors Limited

Scott Danks

07700 720303

 

Company Secretary - Aztec Financial Services (Jersey) Limited

Chris Copperwaite / Magdala Mullegadoo

01534 833000

 

Investor Relations

Kam Bansil

020 7039 1901

 

PR Adviser - FGS Global

Rollo Head: 07768 994987

Chris Sibbald: 07855 955531

 

Corporate Broker - Liberum Capital Limited

Chris Clarke / Owen Matthews

0203 100 2200

 

 

Shares in the Company are not designed or intended for retail investors.
Marwyn Investment Management LLP, the Manager, does not promote shares in the
Company to retail investors and they should not be offered to retail
investors.

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