Sanne to acquire International Financial Services

30th Nov 2016 10:25

(ShareCast News) - Sanne, a specialist provider of outsourced corporate, fund and private client administration, reporting and fiduciary services, has entered into an agreement to acquire International Financial Services (IFS) and its trustees for a consideration of around $127.3m.The consideration will be satisfied through a payment of around $91.1m in cash, through the net proceeds of the capital raising, and the issue of around 5.8m consideration shares, representing around 4.1% of the company's enlarged share capital following completion of the capital raising.The company has proposed that the net proceeds from the the capital raising, of £90.1m, be used for the funding of the cash consideration payable under the acquisition agreement and associated transaction fees, as well as to reduce the group's net debt.The IFS group is "highly profitable and cash generative", recording an operating profit of $18.4m in 2015 at an operating margin of around 65%. Operating cash conversion was around 100% and assets under administration in excess of $82bn.The company plans to use the newly acquired group to form the core of a new standalone division operating as a new emerging markets focused platform. Mauritius is one market in particular that the company sees visible capability, and is also integral to its growth opportunities in Asia and Africa.Chief executive of Sanne, Dean Godwin, said: "This acquisition enables Sanne to further realise its ambition of building a leading, global business. The IFS Group is highly profitable, with a service offering and client base extremely complementary to Sanne's. Mauritius is one of the leading international financial centres for foreign investment into Africa and India and this transaction provides us with a significant platform to both support clients in these attractive regions and grow our emerging markets presence."Founding Director of the IFS group Couldiplall Basanta Lala commented: "We are extremely proud of the business that we have established over the past 20 years and, whilst Sanne is a large organisation with global reach, they share many similarities with our business, in particular the value they place on client service. We look forward to being an integral part of the next phase of growth."The share price rose 5.20% to 520.50p at 1509 GMT on Wednesday.