Sanne: Proposed Acquisition of International Financial Services Limited and IFS Trustees

Sanne, the specialist provider of outsourced corporate, fund and private client administration, reporting and fiduciary services, is pleased to announce that it has entered into an agreement to acquire International Financial Services Limited and IFS Trustees (the "IFS Group") for a total consideration of approximately $127.3 million (£101.9 million).

The consideration for the Acquisition will be satisfied through a payment of approximately US$91.1 million (£72.9 million) in cash, which will be financed through the net proceeds of the Capital Raising, and the issue of approximately 5.8 million Consideration Shares, representing approximately 4.1 per cent. of the Company's Enlarged Share Capital following completion of the Capital Raising and Completion.

The Company proposes to use the net proceeds of the Capital Raising of £90.1 million to fund the cash consideration payable under the Acquisition Agreement and associated transaction fees, as well as to reduce the Group's net debt.

The Acquisition is of sufficient size relative to the Group to constitute a Class 1 transaction under the Listing Rules and is therefore conditional on, among other things, the approval of the Group's shareholders at a General Meeting to be held at 11.30 a.m. on 16 December 2016. 

Highlights

• The IFS Group is a highly profitable and cash generative business, reporting operating profit of USD18.4m in 2015 at an operating profit margin of c.65%, operating cash conversion of c.100%, and assets under administration in excess of $82 billion
• The IFS Group will form the core of a new standalone division operating as Sanne's new emerging markets-focused platform
• A visible capability in Mauritius, which is of scale, is important in allowing Sanne to take advantage of the significant growth opportunity in Asia and Africa
• The Acquisition consideration and associated transaction fees are to be funded through the net proceeds of the Capital Raising (c.£90.1 million) and the issue of c.5.8 million Consideration Shares to the Vendors
• The Acquisition is expected to be immediately earnings enhancing
• The Acquisition is conditional upon, among other things, Sanne shareholder approval, receipt of proceeds from the Capital Raising and regulatory clearance, and is expected to complete in Q1 2017
• The Board is very confident that results for the full 2016 financial year will be in line its expectations following continued strong performance in the second half

Dean Godwin, Chief Executive Officer of Sanne, commented:

"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. I am delighted to welcome the IFS Group team to the Group and we are excited about the opportunities to come."

Couldiplall Basanta Lala, a founding Director of the IFS Group, 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."


Proposed Acquisition and Capital Raising - RNS - London Stock Exchange