AssetCo has entered into an agreement with European private equity firm Preservation Capital Partners to acquire a 30% stake in the investment and advisory platform Parmenion Capital Partners for a maximum amount of £ 27.8 million (38, $ 3 million, € 32.3 million).
It comes hours after Standard Life Aberdeen (SLA) closed the sale of Parmenion to Preservation Capital Partners, a deal that was announced in March.
The 30% stake will be paid in cash, with £ 20.6 million due on completion and up to £ 3.6 million payable in March 2022 and March 2023. AssetCo will fund the initial consideration for Parmenion at from internal cash resources and marketable securities currently held, for a total amount of £ 31.6 million.
The acquisition is conditional on the approval of the Financial Conduct Authority (FCA), which is expected to take place by the end of September 2021.
Following the transaction, it was agreed with Preservation Capital Partners that Gordon Neilly, advisor to AssetCo and former global head of strategy and corporate development at Standard Life Aberdeen, would join the board of directors of Parmenion.
Parmenion manages approximately £ 9 billion in assets under management and serves approximately 1,100 consulting firms and 2,600 financial advisers. It employs 211 people and is headquartered in Bristol.
Benefits for AssetCo
He was backed by former Aberdeen Asset Management CEO Martin Gilbert and a group of investors including former Aberdeen Standard Investments Global Head of Private Markets Peter McKellar and Toscafund Asset Management.
The Board of Directors of AssetCo believes that there are “significant opportunities to further develop Parmenion’s business, both organically and inorganically”, he said in a statement from the London Stock Exchange.
This includes “deepening its relationship with existing clients and expanding its customer base, through continuous technological innovation and expanding its discretionary fund management and platform offerings to meet client demand.”
Ultimately, the company said it would “raise additional capital following authorizations granted by shareholders at the general meeting held in April 2021”.
“A know-how to grow”
McKellar, Vice President and General Manager of AssetCo, said: “Parmenion is a leading investment and advisory platform in the market. The company has a great opportunity to build on its strong IT and customer-centric foundations, given the digital transformation we are witnessing in the asset and wealth management industry.
“The company has the people and expertise to grow and continue to provide services to advisors and clients as they seek to achieve their long-term investment goals.
“Our strategy is to position AssetCo to take advantage of the structural changes occurring in the asset and wealth management industry, such as the increasing use of technology to help individual investors and their advisors.
“This goal is expected to be achieved through the acquisition, primarily, of majority stakes in selected companies that play into these structural changes and supported by strong distribution to drive organic growth.
“Few companies will turn us away from this approach, but we were constrained by Parmenion’s positioning in the market, its strong growth potential and its excellent management team and on this occasion we are delighted to have obtained a participation significant minority in collaboration with Preservation Capital Partners. “
Additionally, SLA and Preservation Capital Partners completed the sale of Parmenion.
The transaction results in the acquisition of the platform by Preservation for around £ 102million.
Stephen Bird, Managing Director of Standard Life Aberdeen, said: “Completing the sale of Parmenion is a step forward in streamlining our business and implementing our strategy.
“Financial advisor technology will be a key driver of growth in the UK wealth and savings market. By focusing on our envelopment and upliftment platforms, we are in the best position to capitalize on this opportunity. “
“Parmenion has enjoyed great success during his tenure with the SLA Group and we wish the team the best of luck on the next leg of their journey with Preservation. “