Brooks Macdonald Group plc · LSE:BRK
Brooks Macdonald — Merger or Acquisition (November 2019)
17 slides from Brooks Macdonald's merger presentation, Nov 22, 2019
Slide 1: Brooks Macdonald's acquisition of Cornelian
Brooks Macdonald’s acquisition of Cornelian A significant step forward in our medium-term strategy to deliver sustainable, value-enhancing growth November 22 2019
Slide 2: Today
Today Announced the acquisition of Cornelian Asset Managers Group Ltd (Cornelian) – an 1 Edinburgh based independent, well-established wealth manager with national distribution reach and track record of profitable growth – for up to £39m Through delivery of its strategy, BM now has foundations in pl
Slide 3: BM is a successful wealth management business, well positioned for the future
BM is a successful wealth management business, well positioned for the future • Founded 1991, listed on AIM in 2005 with <£500m FUM • New leadership: Caroline Connellan appointed CEO in April 2017, Ben Thorpe joined as Group Finance Director in August 2018 • Ongoing growth: delivered by leveraging s
Slide 4: Strategy agreed in 2017, being executed over three phases
Strategy agreed in 2017, being executed over three phases Phase two: Sept 2018 for ~2 years Increase value by enhancing what Improved returns from we do and how we do it sustainable and scalable business model Phase one: Sept 2017 – Sept 2018 Reinforce foundations and • Maximise growth opportunity t
Slide 5: Cornelian is a strong match to BM's stated acquisition criteria
Cornelian is a strong match to BM’s stated acquisition criteria Criteria for acquisition Cornelian fit • Well managed business with excellent reputation, strong focus on clients and intermediaries, and depth of talent 1 High quality business • Track record of delivering growth with fund FUM increasi
Slide 6: Cornelian is a high quality business, with a track record of delivering growth
1 Cornelian is a high quality business, with a track record of delivering growth… • Founded in 1992 as the private client subsidiary of Noble Group, the Edinburgh based investment bank Cornelian FUM by client type • Independent multi-asset investment manager with £1.4bn1 FUM, managed solely on a dis
Slide 7: … and a compelling strategic and cultural fit
2 … and a compelling strategic and cultural fit Cornelian Strategic fit Independent, well-established and Highly complementary – brings additional profitable wealth manager based in multi-asset capability and intermediary Business model Edinburgh with national distribution distribution reach into th
Slide 8: Cost synergies and approach to integration drive strong value creation
3 Cost synergies and approach to integration drive strong value creation Underlying EPS accretion driven by cost synergies and approach to integration Confidence in achieving strong • Total annualised cost savings of c.£3.75m, one-off costs to achieve value creation these synergies of up to £1.5m •
Slide 9: Key transaction terms involve mix of cash and shares
3 Key transaction terms involve mix of cash and shares • Total net consideration of up to £39m, of which: – Up to £37.4m for intangible net assets, including goodwill – £1.6m for required regulatory capital of Cornelian at completion • Represents an estimated pre-synergy P/E multiple of 14 times and
Slide 10: Brooks Macdonald's acquisition of Cornelian…
Brooks Macdonald’s acquisition of Cornelian… • BM’s strengthened leadership team and upgraded risk management and operational framework give the platform to undertake acquisitions, in addition to ongoing focus on organic growth through intermediary relationships • Cornelian represents an attractive
Slide 11: Appendix – Cornelian
Appendix — Cornelian BM BROOKS MACDONALD
Slide 12: Cornelian history
Cornelian history = Since its founding in 1992, Cornelian Asset Managers has grown its business and developed its product offering for an ever increasing customer base 1992 2000 2009 2018 CAM originally founded Company goes through Following a Strategic Review, RG reaches as Noble Asset Management B
Slide 13: Cornelian financial results FY2017-19
Cornelian financial results FY2017-19 £m FY2017 FY2018 FY2019 AUM 1,270.0 1,423.0 1,380.5 Revenue 8.3 10.4 10.3 EBITDA 2.6 3.5 3.4 PBT 2.4 3.4 3.4 Figures from audited accounts for FY2017 and FY2018, and unaudited management accounts for FY2019 and AUM source data at 30 September 2019. Note: FY2019
Slide 14: Important information (1 of 4)
Important information (1 of 4) THIS PRESENTATION AND ITS CONTENTS ARE STRICTLY CONFIDENTIAL AND ARE NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED S
Slide 15: Important information (2 of 4)
Important information (2 of 4) The distribution of this presentation and the offering or sale of securities in certain jurisdictions may be restricted by law and therefore recipients should inform themselves about, and observe any applicable legal or regulatory requirements in relation to, the distr
Slide 16: Important information (3 of 4)
Important information (3 of 4) The information contained in this Presentation may include information which may be material non-public information that is price sensitive in nature ("Inside Information") for the purposes of the Criminal Justice Act 1993 and the EU Market Abuse Regulation (2014/596/E
Slide 17: Important information (4 of 4)
Important information (4 of 4) By attending or otherwise accessing this Presentation, you warrant, represent, undertake and acknowledge to each of the Company, Peel Hunt and Rothschild & Co that: (a) you have read and agree to comply with the foregoing limitations and restrictions including, without
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