Tavistock shares nearly double on GBP40 million wealth unit sale

(Alliance News) - Shares in Tavistock Investments PLC soared on Monday after agreeing the sale of ...

Alliance News 14 June, 2021 | 9:46AM
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(Alliance News) - Shares in Tavistock Investments PLC soared on Monday after agreeing the sale of Tavistock Wealth Ltd for up to GBP40 million in cash.

Shares in Tavistock were up 88% at 4.99 pence in London on Monday, giving the company a market capitalisation of GBP30.3 million.

Tavistock said it has entered a 10-year strategic partnership with Titan Wealth Holdings Ltd. As part of the arrangements, Titan has agreed to buy Tavistock's multi-asset manager with over GBP1 billion of funds under management, Tavistock Wealth, for up to GBP40 million together with a 10-year earn-out.

In tandem with the Tavistock Wealth deal, Titan is looking to buy Global Prime Partners Ltd, a provider of platform services to institutional clients and fund managers with GBP2 billion in assets under administration.

"Titan's objective is to become a large-scale provider of high-quality execution, settlement, custody and administration services to the asset and wealth management sector," Tavistock explained.

Titan will pay GBP20 million for Tavistock Wealth on completion, and the remaining GBP20 million will be paid in equal annual instalments over the following three years, linked to the maintenance of the business's revenue.

Under the strategic partnership, Tavistock will receive additional payments over a ten-year period equivalent in value to 50% of future net income on any increased funds under management within Tavistock Wealth's ACUMEN UCITS funds.

"The transaction will greatly enhance Tavistock's cash resources and will enable it to minimise shareholder dilution as it embarks on an accelerated acquisition programme. The board anticipates that the contribution to Tavistock's profitability from this programme will significantly outweigh the loss of TWL's contribution to Tavistock in the short to medium term," it said.

The partnership will see Tavistock act as Titan's retail distribution partner.

Tavistock stressed that, on completion, it will continue to be classified as an operating company and not an AIM cash shell. It will send a circular to shareholders shortly to seek their approval to proceed with the deal.

"This is a great opportunity for both companies. Whilst Tavistock Wealth is becoming part of Titan, we will still be working closely with our highly successful investment team. The partnership with Titan endorses our corporate strategy and will enable us to accelerate the growth of our business and deliver maximum value to our shareholders," said Tavistock Chief Executive Brian Raven.

By Lucy Heming; lucyheming@alliancenews.com

Copyright 2021 Alliance News Limited. All Rights Reserved.

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Tavistock Investments PLC 4.65 GBX 0.00 -

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