REG - STM Group PLC - Acquisition of SIPP & SSAS portfolio

STMAnnouncement

26/07/2022 07:00

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RNS Number : 6855T  STM Group PLC  26 July 2022

STM Group Plc

("STM" or "the Company" or "the Group")

Acquisition of UK SIPP and SSAS portfolio

'Doubling the size of UK Options personal pension solution business'

 

STM Group Plc (AIM: STM), the cross border financial services provider, is
pleased to announce that it has entered into an agreement to acquire the
portfolio, net assets and trustee companies of the SIPP and SSAS businesses,
from Mercer Ltd, for a fixed consideration of £3.34 million (the
"Acquisition"). Completion is planned for 31 August 2022.

The Acquisition will be funded from existing financial resources and the
remaining available debt facility previously arranged with the Group's bank.

The Acquisition is not subject to regulatory approval as STM is not acquiring
the regulated entities themselves, however both parties have kept the FCA
informed of progress throughout the transaction process.

Highlights of the Acquisition:

·    The Acquisition of the portfolio is complementary to STM's existing
product offerings in the UK SIPP and SSAS market and will add some 2,100 SIPPs
and 700 SSASs to the UK portfolio, which will double the revenue generated
from that UK personal pensions business and provide a solid platform for
scalability, particularly for our SSAS operations, and efficiencies going
forward.

·    STM will retain the office premises in Cardiff, as well as the
existing staff members, who are well regarded and experienced, giving a
further depth of resources and knowledge to STM's UK business.

·    The portfolio generated some £0.87 million EBIT for the last
financial year ended December 2021 and is expected to continue contributing
£0.87 million EBIT to STM's current UK business, Options, on an annualised
basis, after a twelve month phased integration process.  As a result of
transaction costs of £0.3 million, and specific integration costs of £0.3
million, it is anticipated for the four months to 31 December 2022 that the
Acquisition will be a negative contribution of £0.3 million to the Group's
result.

·    STM will work with Mercer's team to ensure a seamless transition for
clients, staff colleagues, and other stakeholders, and have entered a
transition agreement with Mercer for a period of up to six months as
commitment to such a process.

·    The Acquisition of the portfolio will also give Options access to an
expanded network of intermediaries who have introduced clients to Mercer.
Working with the established team in Cardiff, Options will build further on
the existing strong relationships.

·    The Acquisition consideration includes the purchase of the net assets
of the business which amount to circa £1.0 million, which primarily relates
to fees yet to be collected from clients. In addition, Options, will make a
one-off adjustment to account for deferred revenue under its accounting
policy.

 Commenting on the Acquisition, Alan Kentish, Chief Executive Officer of STM,
said:

 "We are delighted that Mercer has chosen STM as the new home for its SIPP
and SSAS business, previously acquired as part of its own acquisition of JLT.
Both ourselves and Mercer are committed to ensuring a seamless transition for
clients, intermediaries, staff and other stakeholders.

"The revenue generated by this portfolio will mean that our Options personal
pension solution business in the UK will effectively double in size and will
give us a new centre of excellence for our SSAS business.

"The business is well run by the team in Cardiff.  This allows us to
implement an integration plan that can dovetail with our overall plans in
relation to changing our operating model to improve our margins, post
significant investment in our IT infrastructure.  I am delighted to welcome
the team to the STM family.

"The SIPP marketplace continues to see change and out of this comes
opportunity to differentiate our proposition. Unlike most SIPP providers, STM
also has a UK workplace pension solution and this in itself allows us to offer
a full suite of retirement savings options to anyone, no matter where they are
within their career path.

"I look forward to updating the market as to our progress on this exciting
next stage of the STM journey."

For further information, please contact:

 STM Group Plc
 Alan Kentish, Chief Executive Officer           Via Walbrook PR

 Nicole Coll, Chief Financial Officer            www.stmgroupplc.com (http://www.stmgroupplc.com)

 finnCap                                         www.finncap.com (http://www.finncap.com)
 Matt Goode / Abigail Kelly - Corporate Finance  Tel: +44 (0) 20 7220 0500

 Tim Redfern / Richard Chambers - ECM

 Walbrook                                        www.walbrookpr.com (http://www.walbrookpr.com)
 Tom Cooper / Joseph Walker                      Tel: +44 (0) 20 7933 8780
                                                 Mob: +44 (0) 797 122 1972
                                                 STM@walbrookpr.com (mailto:STM@walbrookpr.com)

Notes to editors:

STM is a multi-jurisdictional financial services group traded on AIM, a market
operated by the London Stock Exchange. The Group specialises in the
administration of client assets in relation to retirement, estate and
succession planning and wealth structuring.

 

Today, the Group has operations in the UK, Gibraltar, Malta, Australia and
Spain. STM has developed a range of pension products for UK nationals and
internationally domiciled clients and has two Gibraltar life assurance
companies which provide life insurance bonds - wrappers in which a variety of
investments, including investment funds, can be held.

 

STM's growth strategy is focussed on both organic initiatives and strategic
acquisitions.

 

Further information on STM Group can be found at www.stmgroupplc.com
(https://urldefense.proofpoint.com/v2/url?u=http-3A__www.stmgroupplc.com&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=05PHl3GHdShYuaCii2fBRpoqaNr9B1d97X09daeosu0&m=PU7KD9-tYowY3PC9sXem4PQSmJ-Zm8TJB2ox4M8NHwI&s=39Vvq5Ccz7txaqksRCl4B8zUxhpd6elnqEy0XmTed50&e=)

 

 

 

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