MJ Hudson acquires PERACS Group
LONDON: MJ Hudson Group, the international asset management consultancy, has acquired the entire issued share capital of fund performance analytics specialist, Prof Gottschalg UG and its subsidiary PERACS GmbH, a news release said.
The addition of PERACS to the MJ Hudson’s Data & Analytics division follows the acquisitions of a marketing analytics business in this calendar year, an ESG consultant and services provider last year, and an FX and custodian benchmarking consultancy, in December 2018. The transaction is expected to be accretive to earnings per share (EPS) from completion.
PERACS Group offers investors and asset managers in the alternative assets industry a set of proprietary tools to produce authoritative metrics and insights into the performance of funds. Crucially, these insights have applications in core areas for both fund managers and investors:
· they help fund managers articulate exactly how their performance is differentiated; and
· they support investors in their quest for best-in-class fund selection.
Founded in 2005 by Professor Oliver Gottschalg, PERACS’ clients are investors and alternative assets fund managers, based primarily in Northern Europe and North America. Developed during more than 20 years of research, PERACS’ work is recognised by institutional investors and fund managers alike as an industry standard for fund performance.
Initially concentrated around a more forensic approach to the calculation of fund performance, the transaction also brings the potential for additional services in the areas of risk and cashflow forecasting. PERACS will transfer to MJ Hudson´s main office in the City of London and Professor Gottschalg will remain fully active in his existing role.
The initial fixed consideration is €1.4 million, of which part will be satisfied by the issue of 586,016 new ordinary shares in MJ Hudson.
In addition, deferred and earn-out consideration of up to €4.6 million is payable over a three-year period, subject to the achievement of certain performance criteria. The maximum consideration is payable in a mixture of cash and new ordinary shares in MJ Hudson Group plc, as decided by the Company, with the latter representing a maximum of 25% of the total consideration payable.
These shares will be allocated to Professor Gottschalg and the PERACS incoming team and will be subject to lock-in arrangements for a period of at least 12 months from the date of issue.
The cash consideration will be funded from MJ Hudson´s existing cash resources. Further announcements will be made in due course as and when these shares are issued.
For the twelve-month period to December 2019, PERACS generated EBITDA of €0.1 million on revenues of €1.0 million. On the basis of unaudited management accounts, revenues are expected to have increased by more than 40% in the current year.
The business is being acquired with net assets of approximately €0.6 million as at the end of November 2020. The business will trade under the name of MJ Hudson Performance Analytics.
Application will be made for the Initial Consideration Shares to be admitted to trading on AIM and it is expected that Admission will occur on 7 January 2021. Following Admission, the Company will have 172,049,418 ordinary shares in issue carrying voting rights.
Odi Lahav, Group COO and head of MJ Hudson´s Data & Analytics division, said: “We are delighted that Professor Gottschalg and the team have decided to join the Group. He is well known to the senior management here and we’ve followed his firm´s progress with great interest for a number of years.
We believe that adding the PERACS proprietary suite of fund analytics to the MJ Hudson Data & Analytics offering will be very beneficial to our clients and enhances our ability to bring clarity and understanding to the alternative investment industry.
Looking ahead, the deal also helps us to power the next generation of analytical software tools for our clients, by combining machine learning techniques that we’re developing with the more traditional industry standards and the latest academic research.”
Professor Oliver Gottschalg, CEO of PERACS, commented: “I am a long-standing admirer of MJ Hudson and its approach to the alternative assets market. With the additional resources and market platform this transaction affords, we will be able to accelerate the release of new tools and provide our clients with an even better service. In particular, the breadth and depth of MJ Hudson’s services and its international network both provide exceptional opportunities for growth.”
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