IFG Group plc: Recommended Cash Offer

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IFG Group plc (IFP) 
IFG Group plc: Recommended Cash Offer 
 
25-March-2019 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR 
    FROM ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE 
             RELEVANT LAWS OR REGULATIONS OF THAT JURISDICTION 
 
  THIS ANNOUNCEMENT IS BEING MADE PURSUANT TO RULE 2.5 OF THE IRISH TAKEOVER 
             RULES 
 
             THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION 
 
             FOR IMMEDIATE RELEASE 
 
25 March 2019 
 
      RECOMMENDED CASH OFFER 
 
      for 
 
      IFG group PLC 
 
      by 
 
      Saintmichelco limited 
 
     A WHOLLY-OWNED INDIRECT SUBSIDIARY OF FUNDS Advised BY EPIRIS LLP 
 
      TO BE IMPLEMENTED BY WAY OF A SCHEME OF ARRANGEMENT 
      UNDER CHAPTER 1 OF PART 9 OF THE COMPANIES ACT 2014 
 
Summary 
 
  · Epiris GP Limited ("Epiris GP"), as General Partner of the Epiris Funds 
  advised by Epiris LLP ("Epiris"), and IFG Group plc ("IFG") are pleased to 
  announce that they have reached agreement on the terms of a recommended 
  cash offer pursuant to which SaintMichelCo Limited ("Bidco"), a wholly 
  owned indirect subsidiary of the Epiris Funds, will acquire the entire 
  issued and to be issued share capital of IFG. 
 
  · Under the terms of the Acquisition, IFG Shareholders will be entitled to 
  receive: 
 
      for each IFG Ordinary Share GBP1.93 in cash 
 
  · The Acquisition values the entire issued and to be issued ordinary share 
  capital of IFG at approximately GBP206 million. 
 
  · The Acquisition represents: 
 
    · a premium of approximately 46 per cent. to IFG's closing share price 
    of GBP1.325 on 22 March 2019 (being the last practicable date prior to the 
    publication of this Announcement); 
 
    · a premium of approximately 44 per cent. to IFG's volume weighted 
    average share price of approximately GBP1.34 over the one month period 
    ended on 22 March 2019; 
 
    · a premium of approximately 42 per cent. to IFG's volume weighted 
    average share price of approximately GBP1.36 over the three month period 
    ended on 22 March 2019; and 
 
    · a multiple of approximately 21.4 times IFG's adjusted after tax 
    earnings for the year ended 31 December 2018. 
 
  · If any dividend or other distribution is authorised, declared, made or 
  paid in respect of the IFG Ordinary Shares on or after the date of this 
  Announcement, Bidco reserves the right to reduce the Consideration by the 
  aggregate amount of such dividend or other distribution. 
 
  · Commenting on the Acquisition, Kathryn Purves, CEO of IFG, said: 
 
"We are pleased to be announcing this transaction today and believe it is an 
   excellent outcome for shareholders, for the company, and for our clients. 
 The offer by Epiris represents a compelling opportunity for shareholders to 
realise an immediate and attractive cash value for their shareholding in IFG 
        today. In addition, our employees and clients will benefit under the 
      ownership of Epiris which should help accelerate the delivery of IFG's 
         strategic objectives and the underlying strategies of James Hay and 
             Saunderson House." 
 
  · Commenting on the Acquisition, Owen Wilson of Epiris said: 
 
"We are delighted that the Board of IFG has recommended our offer and we are 
excited to work with management to realise the growth potential of James Hay 
      and of Saunderson House and to further enhance their position in their 
   respective markets. James Hay, a trusted provider in the SIPP market, and 
    Saunderson House, a differentiated independent wealth manager, both have 
             strong reputations across their broad range of clients". 
 
  · It is intended that the Acquisition will be implemented by means of a 
  High Court sanctioned scheme of arrangement under Chapter 1 of Part 9 of 
  the Act (or, if Bidco elects, subject to the terms of the Transaction 
  Agreement and with the consent of the Panel, a Takeover Offer). The 
  Acquisition is conditional on, among other things, (i) the approval by IFG 
  Shareholders of the Scheme Meeting Resolution and the EGM Resolutions; 
  (ii) the sanction of the Scheme and the confirmation of the Reduction of 
  Capital, by the High Court; and (iii) receipt of required regulatory and 
  other necessary approvals. 
 
  · Having taken into account the relevant factors and applicable risks, the 
  IFG Board, who has been so advised by Evercore and Goodbody, financial 
  advisers to IFG, consider the terms of the Acquisition as set out in this 
  Announcement to be fair and reasonable. In providing such advice, Evercore 
  and Goodbody have taken into account the commercial assessments of the IFG 
  Directors. Evercore and Goodbody are providing independent financial 
  advice to the IFG Directors for the purposes of Rule 3 of the Takeover 
  Rules. 
 
  · Accordingly the IFG Board unanimously recommends that IFG Shareholders 
  vote in favour of the Acquisition and all of the Resolutions, as they 
  intend to do in respect of their own beneficial holdings of, in aggregate, 
  874,879 IFG Ordinary Shares which represent, in aggregate, approximately 
  0.83 per cent. of the existing issued share capital of IFG as at the last 
  practicable date before this Announcement being 22 March 2019. 
 
  · In addition, Bidco has received an irrevocable undertaking to vote in 
  favour of the Acquisition from Crownway Capital ULC, a company owned and 
  controlled by John Gallagher and his Connected Persons, in respect of 
  10,166,816 IFG Ordinary Shares representing approximately 9.65 per cent. 
  of the issued share capital of IFG. 
 
  · In aggregate therefore, irrevocable undertakings and other commitments 
  to vote in favour of each of the Resolutions required to implement the 
  Scheme have been received by Bidco over 11,041,695 IFG Ordinary Shares, 
  representing approximately 10.48 per cent. of the issued share capital of 
  IFG. Further details of the irrevocable undertakings are set out below in 
  paragraph 4 of this Announcement, including the circumstances in which the 
  irrevocable undertakings cease to be binding. 
 
  · The Scheme Document, which will contain, amongst other things, further 
  information about the Acquisition, notices convening the Scheme Meeting 
  and the Extraordinary General Meeting, the expected timetable for 
  Completion and action to be taken by IFG Shareholders, will be published 
  as soon as practicable and, in any event, within 28 days of this 
  Announcement. It is anticipated that the Scheme will, subject to obtaining 
  the necessary regulatory and other necessary approvals, be declared 
  effective in the second half of 2019. 
 
About Epiris LLP 
 
  · Epiris is one of the longest-established private equity firms in the UK. 
  Formerly known as Electra Partners, Epiris managed the FTSE 250-listed 
  investment trust Electra Private Equity PLC until 2017, and in 2018 Epiris 
  announced the final close of Epiris Fund II, an institutional private 
  equity fund that attracted capital commitments totalling GBP821 million from 
  some of the world's leading investors. 
 
  · Epiris invests in UK-headquartered businesses with an enterprise value 
  of between GBP75 million and GBP500 million. It has a strong track record of 
  transforming businesses in partnership with exceptional management teams. 
  Its approach is to focus on strategic clarity, operational excellence, 
  growth acceleration and M&A. 
 
About IFG plc 
 
  · IFG is a financial services holding company with full market listings in 
  London and Dublin. IFG's businesses provide financial solutions to end 
  customers and financial advisers. James Hay provides pensions 
  administration and investment platform services and Saunderson House is an 
  independent wealth manager and financial adviser. 
 
  · As at 31 December 2018, IFG had GBP30.2 billion of assets under 
  administration or advice across James Hay (GBP25.3 billion of assets under 
  administration) and Saunderson House (GBP4.9 billion of assets under 
  advice). In the year ended 31 December 2018, IFG reported an adjusted 
  operating profit of GBP12.4 million and, on a statutory basis, a post tax 
  loss of GBP1.0 million. IFG generated operating free cash flow of GBP6.6 
  million and net cash flow (after interest, retention payments and head 
  office restructuring costs) of GBP3.1 million for the year ended 31 December 
  2018. 
 
        This summary should be read in conjunction with the full text of the 
             following Announcement and its appendices. 
 
The Conditions to, and certain further terms of, the Acquisition are set out 
in Appendix C to this Announcement and the Acquisition is subject to further 
 terms to be set out in the Scheme Document. Appendix A to this Announcement 
  contains certain sources of information and bases of calculation contained 
in this Announcement. Certain terms used in this Announcement are defined in 
             Appendix B to this Announcement. 
 
  This Announcement contains inside information and has been issued pursuant 
 to Article 2.1(b) of Commission Implementing Regulation (EU) 2016/1055. The 
 date and time of this Announcement is the same as the date and time that it 
             has been communicated to the media. 
 
Enquiries: 
 
Houlihan Lokey (Financial Adviser to Epiris) 
   Lawrence Guthrie / Christian                [phone] 
  Kent / Yashin Mody / Sam Ward 
Greenbrook (media enquiries for Epiris) 
     Matthew Goodman / Katarina                [phone] 
     Sallerfors / Daniel Oliver 
 
IFG 
  Kathryn Purves / Gavin Howard                [phone] 

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March 25, 2019 03:01 ET (07:01 GMT)