REG - Team PLC - Acquisition

TeamAnnouncement

01/06/2023 07:15

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RNS Number : 2488B  Team PLC  01 June 2023

1 June 2023

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TEAM PLC

("TEAM", the "Company" or the "Group")

Conditional Acquisition of Thornton Associates

Leading Isle of Man Financial Planning Business

TEAM plc (AIM: TEAM), the wealth, asset management and complementary financial
services group, is pleased to announce that it has conditionally agreed to
acquire the entire issued share capital of Thornton Associates Limited,
trading as Thornton Chartered Financial Planners ("Thornton"), (the
"Acquisition") for a consideration of up to £2.5 million. Thornton is an Isle
of Man based financial planning business, the first chartered status firm on
the island, providing holistic financial planning services with assets under
advice ("AUA") of £121 million and approximately 180 client groups.

 

Highlights

 

·     Conditional acquisition of Thornton for consideration of up to
£2.5 million

·     Natural fit with TEAM's assets in Jersey and in line with strategy
to expand into other Crown Dependencies

·     Potential for delivery of significant synergies and cross-selling
opportunities

·    TEAM is also announcing separately today its unaudited interim
results for the six months ended 31 March 2023 and the acquisition of
Globaleye Wealth Management Group ("Globaleye")

·    Post-completion, these two acquisitions will take TEAM's assets
under management and advice to over £850 million

·     Thornton and Globaleye represent TEAM's fifth and sixth
acquisitions in the last three years

 

Consideration

 

On completion of the Acquisition ("Completion"), an initial consideration of
£0.9 million is payable in cash, plus an amount equal to the net assets of
Thornton of £250,000 less regulatory capital of £50,000. In addition, a
deferred consideration of up to £1.4 million is payable, half in new TEAM
shares and half in cash. The deferred consideration is payable in two
instalments of up to £700,000, dependent upon the revenue generated by
Thornton in the 24 months following Completion. The Acquisition is subject to
approval by the Isle of Man Financial Services Commission and is expected to
complete in Autumn 2023. The cash consideration payable will be funded through
existing resources within the Group, and from the future earnings of TEAM.

 

Thornton - overview

·   Thornton is a firm of chartered Financial Planners providing
multi-jurisdictional financial planning and regulated investment advice to
private individuals, trustees and business owners on the Isle of Man

·     Founded in 2000 by its Managing Director, Sharon Sutton, it now
supports some 180 client groups (typically high net worth couples and
families) with unaudited AUA as at 31 March 2023 of £121 million, largely
invested by third party discretionary managers

·     In the year ended 31 March 2023, Thornton generated unaudited
revenues of £0.75 million, profit before and after tax of £0.22 million and
as at 31 March 2023 had unaudited net assets of £0.40 million

 

Acquisition Rationale

·    In a market where competition is limited, Thornton is a profitable,
well-managed and highly regarded financial planning business. The TEAM
Directors expect a smooth integration with the Group. A key element of TEAM's
strategy is to have representation in all of the Crown Dependencies. Thornton
is the first step it has taken outside Jersey and makes for a compelling
strategic and cultural fit with TEAM, given complementary business models,
strong client relationships and an active flow of new clients coming into
Thornton

·     The Isle of Man represents an exciting opportunity for TEAM. In
addition:

o  Potential synergies have been identified by TEAM's Directors, primarily
through Thornton joining a larger financial planning group and being able to
access shared support services

o  Opportunity to offer Thornton services to current and future TEAM clients,
and vice versa, most significantly the opportunity for Thornton clients to
migrate from third party managers to using the investment expertise of TEAM
Asset Management and its model portfolio and bespoke services

o  TEAM plans to integrate Thornton into its financial planning activities,
sharing best in class practices across the offices and moving towards one
operating model and brand. No one-off costs are expected from this integration
exercise

·     The Acquisition is expected to be earnings enhancing in the first
year of ownership

·     The total consideration payable represents an estimated forward P/E
of 7x before revenue and cost synergies are generated

·     The Acquisition will be the Company's fifth transaction since its
inception in January 2020 and is expected to complete in Autumn 2023

·   On completion of the acquisitions of both Thornton and Globaleye, TEAM
expects to have assets under management and advice of over £850 million

 

Matthew Moore, CFO of TEAM, commented:

"In the Isle of Man, Thornton has been at the forefront of financial planning
to help its clients manage, protect and maximise their wealth. In doing so, it
has built a strong reputation across the island. Becoming part of TEAM is a
natural fit and will, we believe, facilitate the next stage of growth for
Thornton which will benefit from being part of a larger group, offering a
wider range of services whilst maintaining the same customer centric ethos.

We are delighted to welcome Thornton into the Group. The acquisition is a
natural extension into the Isle of Man from our base in Jersey and matches our
strategy to build a new wealth, asset management and complementary financial
services group with a focus on the UK, Crown Dependencies and International
Finance Centres."

 

Market Abuse Regulation

For the purposes of MAR and Article 2 of Commission Implementing Regulation
(EU) 2016/1055, this Announcement is being made on behalf of the Company by
Matthew Moore, Chief Financial Officer of the Company.

 

Enquiries to

 TEAM plc                                              +44 1534 877 210

 Mark Clubb, Executive Chair

 Matthew Moore, CFO and COO

 Hatstone (Legal adviser to TEAM)

 Simon Vivian

 Shore Capital (Nominated Adviser and Broker to TEAM)  +44 20 7523 8000

 Tom Griffiths, Iain Sexton, Guy Wiehahn

 Novella Communications (Financial Public Relations)   +44 20 3151 7008

 Tim Robertson, Claire de Groot, Safia Colebrook

 Hannam & Partners (Financial adviser to TEAM)         +44 20 7907 8500

 Giles Fitzpatrick, Ernest Bell, Richard Clarke

www.teamplc.co.uk

 

 

Background

TEAM plc is building a new wealth, asset management and complementary
financial services group. With a focus on the UK, Crown Dependencies and
International Finance Centres, the strategy is to build local businesses of
scale around TEAM plc's core skill of providing investment management
services. Growth will be achieved via targeted and opportunistic acquisitions,
through team and individual hires, through collaboration with suitable
partners, and organic growth and expansion.

Thornton results

Figures in the below table are taken from the unaudited management accounts
for the year ended 31 March 2023.

 £'000              Year ended 31 March 2023
 Gross income       747
 Profit before tax  218
 Client AuA         £121 million
 Net assets         400

 

Figures in Table below are an illustrative representation of the Group's
expectation for the acquired business in a full financial year.

 £'000              Illustrative full year
 Gross income       750
 Profit before tax  250

 

The financial illustrations set out in this announcement are illustrative
only, representing reasonable assumptions, based on the financial information
available at the time of the announcement. However, all financial information
provided is subject to change and these illustrations may be different from
the actual financial position. No reliance should be placed on the
illustrations set out in this announcement.

 

END

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