Saturday 20 April 2019

IFG shares soar on €240m Epiris deal

Opportunity: IFG CEO Kathryn Purves said the deal was a chance for shareholders ‘to realise an immediate and attractive cash value’
Opportunity: IFG CEO Kathryn Purves said the deal was a chance for shareholders ‘to realise an immediate and attractive cash value’
Ellie Donnelly

Ellie Donnelly

FINANCIAL services firm IFG is to be sold to private equity firm Epiris GP for £206m (€240.6m).

Shares in the company, which is listed in both Dublin and London, shot up over 43pc yesterday following the news.

The offer, which works out at 193p per share, will see SaintMichelCo ('Bidco") acquire the entire share capital of IFG. Bidco is a wholly-owned subsidiary of the Epiris Funds.

IFG has two businesses - James Hay and Saunderson House.

James Hay provides pensions administration and investment platform services, and Saunderson House is an independent wealth manager and financial adviser.

Jack O'Halloran, analyst at Davy Stockbrokers, said the offer price was "significant" based on how the group has been trading over the past number of months.

"The business has challenges in terms of its legacy issues, but for both businesses there is the potential for long-term structural growth," he said.

The sale must be approved by shareholders.

The move comes after what has been a difficult few years for IFG, as it tackled a number of legacy issues at the group, including with UK tax authorities.

The company, led by CEO Kathryn Purves, had put its Saunderson House wealth management division up for sale last year, then abandoned that plan. It then overhauled management.

Ms Purves said she believed the sale to be an "excellent" outcome for shareholders, the company, and its clients.

"The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG," Ms Purves said.

"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."

IFG also announced its full-year results for the year ended December 31, 2018 yesterday.

Revenues grew by 12pc to £87.6m (€102m) and adjusted operating profit by 18pc £12.4m (€14.5m).

Operating profit (after exceptional costs and amortisation) was £300,000 (€350,000) up from a loss of £400,000 (€467,000) in 2017.

The group incurred exceptional costs of £9.9m (€11.5m) of which £5.5m (€6.4m) related to legacy problems in its James Hay division.

IFG said it "remains confident" that any settlement with British Revenue would be "materially" lower that the circa £20m (€23.3m) included in British Revenue's assessments, and that any financial exposure would be fundable from its cash resources.

Looking at the 2018 results, Mr O'Halloran said that both businesses had performed better than Davy forecasts, but that profits were impacted as a result of the group's exceptional items.

Irish Independent

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