REG - MJ Hudson Group PLC - Sale of UK Fund Management Business

MJ HudsonAnnouncement

10/03/2023 09:00

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RNS Number : 5621S  MJ Hudson Group PLC  10 March 2023

MJ Hudson Group plc

(the "Company", "Group" or "MJ Hudson")

 

Sale of UK Fund Management Business

 

 

MJ Hudson Group plc (AIM:MJH), the specialist service provider to the asset
management industry, announces that, on 9 March 2023, Tower Gate Capital
Limited, an indirect wholly owned subsidiary of the Company, entered into a
conditional agreement with Khepri Limited (the "Purchaser") to sell to it the
Group's UK Fund Management business ("FMS Business").

 

The companies that are being sold under the FMS Sale are:

 

1.            MJ Hudson Advisers Limited

2.            MJ Hudson Fund Management Limited

3.            MJ Hudson Consulting Limited

4.            MJ Hudson Fund Administration Limited

(the "FMS Companies")

 

The Purchaser is a special purpose acquisition vehicle set up to acquire the
FMS Companies and certain client contracts being serviced by the FMS
Companies. It is currently wholly owned by William Roxburgh and Michael Booth,
both directors of the FMS Companies (the "FMS Directors") but will be funded
by investment by way of convertible loan notes and equity investment from
David Sherriffs.  It is expected that, on a fully converted basis, this will
convert such that the FMS Directors would hold 10% following such
conversion.

 

The consideration for the transaction is £1.0 million in cash plus £15,000
for the first three months from exchange and £30,000 thereafter until
completion, to be paid on completion.

 

Following exchange, the Purchaser will also provide £1.8 million of working
capital to the FMS Companies of which £1.3 million is expected to be used as
regulatory capital following completion.   On completion, the inter company
loans between the Group and the FMS Companies will be reorganised as a
consequence of which the outstanding loans due from the Group to the FMS
Companies, which are £1.98 million, will be extinguished

 

Completion will take place once regulatory approval from the Financial Conduct
Authority is received.

 

The profits before tax attributable to the assets being sold for the audited
year to June 2021 was £600,000 and profits before tax for the unaudited year
end June 2022 were £22,000. The value of the FMS Business on the Group's
balance sheet is £1.07 million.  Any monies received will be used to provide
working capital to the Group and/or repay the Group's debts.

 

As FMS Directors are directors of the FMS Companies and sole shareholders of
the Purchaser, the acquisition represents a related party transaction.  The
directors of the Company consider, having consulted with the Company's
Nominated Adviser, Cenkos Securities, that the terms of the acquisition are
fair and reasonable insofar as its shareholders are concerned.

 

For further information, please contact:

 

MJ Hudson Group plc

Geoff Miller, Executive Chairman

 

Cenkos Securities plc (Nomad and Broker)

Giles Balleny

Stephen Keys

Callum Davidson

+44 20 7397 8900

 

Buchanan (PR Adviser)

Chris Lane

Jack Devoy

George Cleary

+44 20 7466 5000

mjhudson@buchanan.uk.com

 

 

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