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AssetCo PLC on Tuesday said it has reached an agreement to buy Edinburgh-based SVM Asset Management Holdings Ltd, building its Scottish presence.
Shares in the London-based advisory and asset management firm were up 5.5% to 717.50 pence each in London on Tuesday midday.
AssetCo will buy SVM through the issue of up to £9.0 million in 1% fixed rate unsecured convertible loan notes in AssetCo and, subject to balance sheet adjustments, around £1.7 million in cash. The loan notes can be converted into AssetCo shares at £14.50 per share; otherwise, they will be repaid at the end of 2023.
SVM is a fund management business with around £586 million of assets under management.
In 2021, it booked pretax profit of £2.0 million on £4.3 million in revenue. Post a restructuring that is currently being undertaken by SVM, AssetCo said SVM is expected to have net assets and net cash reserves of approximately £4 million each.
AssetCo said that the acquisition of SVM will ‘enhance’ its growing Scottish brand. It plans to build a strong asset management hub in Edinburgh, focused on managing listed equities, the company added.
Chair Martin Gilbert said: ‘We are immensely proud to be building an asset management hub in Edinburgh that, over time, will broaden its client base across the UK and beyond. SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record. Its business model, people and product offering are its key assets, and it is core to AssetCo's ambitions.’
Gilbert was the co-founder of Aberdeen Asset Management.
The acquisition requires approval by UK financial sector regulator the Financial Conduct Authority, which is expected by the end of September.
AssetCo recently completed the £99 million acquisition of River & Mercantile Group PLC.
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