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TP ICAP to buy out Louis Capital group for ?16m
24th Dec 2019 07:19
(Sharecast News) - TP ICAP announced the proposed acquisition of Louis Capital Markets and MidCap Partners - collectively 'Louis Capital - a private brokerage group specialising in equities and fixed income, primarily based in Europe, on Tuesday.
The FTSE 250 company said the initial consideration for the acquisition would be $21m (£16.22m) in cash, payable at completion, with deferred non-contingent consideration of $6m to be paid over two years.
There would be a further $17m of deferred contingent consideration that could be payable, depending on the performance of the business over three to five years.
Finally, there was potential additional consideration via a profit share, also depending on the performance of the business.
Those subsequent payments would be satisfied through cash payments.
TP ICAP said it expected the acquisition to be earnings accretive from the first year of acquisition on an underlying basis, and from the second year on a reported basis.
For the year ended 31 December 2018, Louis Capital made a profit before tax of $4.3m, and on that date it had gross assets of $35.4m.
"Louis Capital's strong brand and breadth of equity, equity derivatives and fixed income products complement our existing offering and strengthen TP ICAP's position in Continental Europe," said TP ICAP's chief executive officer Nicolas Breteau.
Louis Capital operates in London and Paris, with other offices in New York, Hong Kong and Tel Aviv.
The group has 77 front-office employees, and specialises in cash equities and equity derivatives, fixed income and small cap advisory services.
Michael Benhamou and Patrice Cohen, who founded and led Louis Capital, would remain as senior management.
Completion of the transaction was expected to take place in the first quarter of 2020, and remained subject to customary completion deliverables and certain other customary commercial conditions, as well as regulatory approval by the Financial Conduct Authority in the UK, the Financial Industry Regulatory Authority in the United States, and other relevant regulators.
"We strongly believe that the Louis Capital business will be an excellent cultural fit to TP ICAP," said Louis Capital co-CEOs Michael Benhamou and Patrice Cohen in a statement.
"We are committed to developing it further within the group."
The FTSE 250 company said the initial consideration for the acquisition would be $21m (£16.22m) in cash, payable at completion, with deferred non-contingent consideration of $6m to be paid over two years.
There would be a further $17m of deferred contingent consideration that could be payable, depending on the performance of the business over three to five years.
Finally, there was potential additional consideration via a profit share, also depending on the performance of the business.
Those subsequent payments would be satisfied through cash payments.
TP ICAP said it expected the acquisition to be earnings accretive from the first year of acquisition on an underlying basis, and from the second year on a reported basis.
For the year ended 31 December 2018, Louis Capital made a profit before tax of $4.3m, and on that date it had gross assets of $35.4m.
"Louis Capital's strong brand and breadth of equity, equity derivatives and fixed income products complement our existing offering and strengthen TP ICAP's position in Continental Europe," said TP ICAP's chief executive officer Nicolas Breteau.
Louis Capital operates in London and Paris, with other offices in New York, Hong Kong and Tel Aviv.
The group has 77 front-office employees, and specialises in cash equities and equity derivatives, fixed income and small cap advisory services.
Michael Benhamou and Patrice Cohen, who founded and led Louis Capital, would remain as senior management.
Completion of the transaction was expected to take place in the first quarter of 2020, and remained subject to customary completion deliverables and certain other customary commercial conditions, as well as regulatory approval by the Financial Conduct Authority in the UK, the Financial Industry Regulatory Authority in the United States, and other relevant regulators.
"We strongly believe that the Louis Capital business will be an excellent cultural fit to TP ICAP," said Louis Capital co-CEOs Michael Benhamou and Patrice Cohen in a statement.
"We are committed to developing it further within the group."