LONDON, UK: Sanne Group, the global provider of alternative asset and corporate services, announced the accretive acquisition of the European fund administration business of PraxisIFM Group Ltd for £54 million.

The Funds Business is one of the leading players in the European listed funds administration sector, which has consistently delivered double digit revenue growth in recent years. This strategically important acquisition augments Sanne’s existing presence in this significant sector, especially for the UK market whilst also deepening its rapidly expanding footprint in Guernsey, the preeminent domicile for European private equity funds.

The transaction adds over 80 employees and more than £25 billion of assets under administration to Sanne, with offices in Guernsey, Jersey, London, Luxembourg and Malta. Sanne and the Funds Business have a close cultural alignment, sharing a strong focus on delivering high quality client service.

The total cash consideration of £54 million is payable upon completion and will be funded from the Group’s existing resources. The Funds Business is expected to deliver revenues of c. £13 million for the year ending 30 April 2022.

Once integrated, with the removal of current PraxisIFM group recharges, we anticipate the business delivering profit margins in-line with Sanne’s own. For the year ended 30 April 2020 the Funds Business had profits before tax, after application of group recharges, of £1.1 million and gross assets of £4.5 million.

The acquisition is expected to complete during Q4 2021, subject to regulatory approvals and is expected to be immediately earnings enhancing.

This is Sanne’s third acquisition this year with the Group continuing to pursue a healthy pipeline of potential transactions. The Group remains disciplined in its approach to acquisitions, focusing on executing transactions that are accretive to the Group’s long-term strategic vision and value.

Sanne has delivered another resilient performance in the half-year to 30 June 2021 and continued to see stronger growth returning to its core markets despite the ongoing COVID-19 pandemic conditions. As such, the Board remains confident in delivering full year results in line with its expectations.

This improved performance included a significant increase in new business activity, with first half 2021 annualised total new business wins up c.38% on the second half of 2020 to £15.7 million.

The first half has also seen a robust improvement in half-on-half constant currency organic growth from a flat performance in the second half of 2020. On a constant currency basis, the Group expects to report underlying operating profit margins broadly flat on the first half of 2020 but anticipates further second half improvement as the growth in new business wins is reflected in the results. Both the PEA and STRAIT acquisitions, which were completed in the first half, have performed well in the period.

The half year has also seen another strong cash performance with underlying operating cash conversion, once more ahead of the 90% guidance.

Sanne Group PLC share price

850.00 GBX+3.00 (0.35%)today

28 Jul, 8:04 am GMT+1 ·Disclaimer