LONDON, UK: TEAM plc has acquired JCAP Limited, trading as JCAP Treasury Services, a leading Jersey based provider of cash management services, focused on improving the return and mitigating the risks associated with the management of cash for institutions, professional advisers, trustees and high net worth individuals.

JCAP has over £1.3 billion in assets under advice. The total net consideration payable is up to £2.95 million, of which £2,212,501 will be paid in cash and £737,499 in newly issued TEAM shares. The net tangible current assets of the business, of approximately £700,000 are being acquired on a pound for pound basis, in addition to the total net consideration.

The payment at completion is for £1,659,376 in cash, funded from existing company resources, with £553,124 in TEAM shares, being 740,461 new TEAM shares at an issue price of 74.7pence per share.

The deferred consideration payment of up to £735,500 is payable depending upon JCAP meeting certain performance targets in the period up to 31 December 2021, and payable by 31 March 2022, of which up to £553,125 is payable in cash and £184,375 in TEAM shares, based on the closing price in the 10 business days prior to the time of issue.

Highlights:

· JCAP is a well-established and profitable Jersey business, and has been known to Mark Clubb, Executive Chairman of TEAM, since its establishment in 2010

· JCAP provides a range of cash management services to institutions, professional advisers, trustees and high net worth individuals

· It has long-term partnerships established with leading global providers of treasury management and foreign exchange services, providing diversification of income sources, and significant opportunities for high profit margin growth

· In the unaudited accounts for the year to 31 December 2021 JCAP generated revenues of £1,002,160 and made a post-tax profit of £374,972. Net assets at that date were £918,282.

The acquisition has a compelling strategic rationale:

· Fits with TEAM’s strategy to acquire wealth, asset management and complementary financial services business

· Clear synergistic revenue growth opportunities through providing cash management services to the TEAM client base, and through the potential to launch cash management products through the regulated fund business of TEAM

· Builds scale in the home market of Jersey

Material financial benefits expected from the acquisition:

· A significant increase in the revenues of the group, with the addition of over £1.3 billion in assets under advice, and a significant step for TEAM towards becoming cashflow positive

· A combination of expected revenue and cost synergies, through client referral, co-locating in TEAM’s offices, and through using TEAM’s governance and control infrastructure

· The net consideration represents a P/E multiple of 7.9 times the 2020 earnings

Mark Clubb, Executive Chairman of TEAM, commented: “At the time we listed we told our shareholders that we had a well-researched and solid acquisition pipeline and that we would work through that pipeline with rigour and focus. The acquisition of JCAP is the first evidence of that. We continue to execute on our acquisition strategy as well as develop more accretive opportunities.

JCAP is a natural fit with our plans for the development of TEAM. Cash management is a complementary service for many of our current and future clients, and JCAP is the leading provider of these service in the Channel Islands. We are currently in a period of historically low interest rates where yield optimisation on cash balances generates minimal returns.

Against this market background JCAP is a highly profitable business, and if interest rates increase, as seems likely, this will add significant momentum to profits as clients seek out JCAP’s services to improve returns and risk management on their and clients’ cash holdings.”

TEAM plc is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM plc’s core skill of providing investment management services. Growth will be achieved via targeted and opportunistic acquisitions, through team and individual hires, through collaboration with suitable partners, and organic growth and expansion.

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2 Jul, 11:12 am GMT+1 ·Disclaimer