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Brooks Macdonald to acquire Cornelian
Posted on Friday, 22 November 2019 11:49
Brooks Macdonald Group has agreed to buy UK-based independent investment management company Cornelian Asset Managers Group for GBP 39.00 million.
The consideration includes an upfront sum of GBP 31.00 million, consisting of GBP 22.00 million in cash and GBP 9.00 million in shares, as well as an earnout of GBP 8.00 million based on certain performance-related targets and savings being achieved.
Completion is slated for the first quarter of 2020, subject to regulatory approval.
Brooks Macdonald plans to finance the cash portion of deal with proceeds from a private placing.
Edinburgh-headquartered Cornelian focuses on creating and managing diversified, multi-asset portfolios and risk-managed funds.
Its discretionary investment management services allow users to access the online system ClientZone, which compiles periodic reports, portfolio valuation details and other relevant documents.
Cornelian’s customers include the likes of financial advisors, private clients, fund investors and charities.
For the financial year ended 30th September 2019, the target generated earnings before interest, taxes, depreciation and amortisation of GBP 3.40 million, on revenue of GBP 10.30 million.
As of the same date, Cornelian had funds under management of USD 1.40 billion.
Through the transaction, Brooks Macdonald will strengthen its intermediary distribution reach, add proven multi-asset funds to its portfolio and scale up its direct client offering.
Caroline Connellan, chief executive of the company, said: “The acquisition of Cornelian is a significant step forward in our medium-term strategy of delivering sustainable, value-enhancing growth.”
Brooks Macdonald expects the deal to increase its pro forma funds under management by 10.0 per cent to GBP 14.70 billion.
The transaction is also projected to generate annual savings for the business of GBP 3.75 million by the end of the first full financial year following closing.
In addition, Brooks Macdonald’s earnings per share is expected to increase in the 12 months to 30th June 2020 and rise by around 9.0 per cent in the fiscal year ended 30th June 2021.
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