TAM Tatton Asset Management Plc

TIDMTAM

RNS Number : 7843L

Tatton Asset Management PLC

15 September 2021

15 September 2021

Tatton Asset Management PLC

("TAM plc", the "Group" or the "Company")

ACQUISITION AND STRATEGIC DISTRIBUTION PARTNERSHIP

Acquisition of GBP650 million Verbatim Funds

and

Strategic Distribution Partnership with Fintel plc

TAM plc (AIM: TAM), the investment management and IFA support services group, is pleased to announce the acquisition of GBP650m Verbatim funds ("Verbatim funds") for a cash consideration of up to GBP5.8m and a long-term strategic distribution partnership with Fintel plc (AIM: FNTL), a leading provider of fintech and support services to the UK retail financial services sector.

Key highlights of the transaction:

 
--  the transaction supports the Group's strategy to grow assets under 
     management ("AUM") through both acquisition and through strategic 
     partnerships that extend its distribution channels facilitating further 
     organic growth; 
--  the acquisition of the Verbatim multi-asset and multi-index funds 
     adds c.GBP650m to Tatton Investment Management's ("Tatton") AUM, complementing 
     and extending our existing fund range; 
--  the five-year strategic distribution partnership with Fintel plc provides 
     access to over 3,800 new financial intermediary firms and its 6,000 
     Defaqto users, significantly enhancing our reach and distribution 
     to further contribute to the organic growth of our AUM; and 
--  the technology provides insights and analysis, enabling targeted product 
     design and distribution further benefiting the Group through access 
     to 2,500 market-leading fintech licences to distribute to Tatton and 
     Paradigm firms and users. 
 

Financial impact:

 
--  the transaction, which includes both the acquisition of the funds 
     and a five-year strategic distribution partnership agreement, is expected 
     to be earnings enhancing in the financial year ending 31 March 2022 
     ("FY22") and beyond; 
--  over the remainder of FY22, the partnership, including the Verbatim 
     funds, is expected to generate adjusted operating profit of c.GBP0.6m, 
     with adjusted operating profit of c.GBP1.5m expected in FY23, the 
     first full financial year; 
--  consideration of up to GBP5.8m, representing c.0.9% of AUM, of which 
     GBP2.8m has been paid in cash on completion with the remainder also 
     payable in cash, being subject to certain performance conditions over 
     the next four years; 
--  the acquisition is being funded from existing cash resources on the 
     balance sheet; and 
--  post transaction the Group will still have strong cash resources of 
     c.GBP15m. 
 

Commenting on the transaction and partnership Paul Hogarth, Chief Executive Officer, said:

"I am delighted to announce the acquisition of GBP650m of the Verbatim funds and this five-year strategic partnership with Fintel plc, a firm whose strategy and values are aligned with our own; keeping the IFA at the heart of our respective businesses.

"The transaction clearly demonstrates the progress we are making in executing on our growth strategy. We have set out a roadmap for growth over the next three years, growing our AUM organically and by acquisition and extending our reach to the IFA community, the lifeblood of our industry, through strategic partnerships. This transaction is evidence of that strategy in action and it enhances our proposition to IFAs and their clients further, with the multi-index and multi-asset funds complementing and extending our current fund range.

"We are excited to be working more closely with Fintel plc, a business we have known and respected for a very long time. I have no doubt that this is a fantastic opportunity for both businesses to continue to deliver against their strategic objectives, while delivering real shareholder value."

For further information, please contact:

 
Tatton Asset Management PLC 
 Paul Hogarth (Chief Executive Officer) 
 Paul Edwards (Chief Financial Officer) 
 Lothar Mentel (Chief Investment Officer)          +44 (0) 161 486 3441 
Zeus Capital - Nomad and Broker 
 Martin Green (Corporate Finance) 
 Dan Bate (Corporate Finance and QE)               +44 (0) 20 3829 5000 
Singer Capital Markets - Joint Broker 
 Peter Steel (Investment Banking)                  +44 (0) 20 7496 3061 
 Rachel Hayes (Investment Banking)                 +44 (0) 20 7496 3189 
Belvedere Communications - Financial 
 PR                                                 +44 (0) 7407 023147 
 John West / Llew Angus (media)                    + 44 (0) 7715 769078 
 Cat Valentine / Keeley Clarke (investors)     tattonpr@belvederepr.com 
Trade Media Enquiries 
 Roddi Vaughan Thomas                              +44 (0) 20 7139 1452 
 

For more information, please visit: www.tattonassetmanagement.com

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