Specialist independent fund manager Liontrust Asset Management (LIO) announced the proposed acquisition of Architas Multi-Manager and Advisory Services for up to £75 million, as well as a trading update showing a 21% increase in assets under management and administration since 31 March 2020. The shares ran up 3.5% to £13.5.
STRATEGIC DIRECTION
The company said the acquisition formed part of its strategy to diversify its product range and accelerate growth. The Architas UK business was established in 2008 and provides a broad product range across 25 passive, active and blended funds. The business had £5.6 billion of assets under management and administration.(AuMA)
Chief executive John Ions said the deal was ‘an important strategic acquisition’ and will ‘expand our distribution among financial advisors through the scale of the combined businesses.’ The deal will create a multi-manager business with £6.6 billion of assets, up from £919 million.
The company believes the resulting combination will make Liontrust a ‘significant provider’ of multi-manager investments in the UK and create one of the most experienced multi-asset-manager investment teams in the UK market.
PLACING
The acquisition will be paid for by a non-preemptive accelerated book building process led by Panmure Gordon, placing up to 5.09 million new shares or 9.2% of the existing share capital at £13 per share.
Preemptive rights give existing shareholders the right to buy new shares.
The integration is expected to incur transaction costs of £5 million and re-organisation costs of around £9 million related to separating the Architas UK Investment Business from AXA Group.
The deal is expected to be broadly neutral for diluted earnings per share for the year ended 31 March 2021 and earnings enhancing thereafter.
STRONG TRADING
The company provided a brief update on trading up to the close of business on 19 June saying it experienced a 21% increase in AuMA and net inflows of £901 million for the period from 1 April, leaving AuMA at £19.4 billion.
The Economic Advantage and Sustainable investment teams dominate the AuMA with a combined £14.1 billion.
