Charles Stanley acquires Garrison Investment Analysis Limited
14 June 2007
Charles Stanley Group Plc (“Charles Stanley”) is pleased to announce the acquisition of Garrison Investment Analysis Limited (“Garrison”) for a maximum consideration over a period of two years of £8 million.
The initial consideration for the acquisition of 75.1% of the equity is approximately £6 million satisfied by a combination of cash and loan notes. The remaining balance of 24.9% will be acquired for approximately £2 million on the second anniversary of the initial completion. The warranted net assets figure at the time of completion will be £325,000 mainly comprising freehold property. As part of the acquisition agreement Garrison will distribute all post tax earnings by way of dividend to the shareholders for the next two years.
Garrison is one of the leading discount financial intermediaries within the UK, concentrating on the direct marketing of investments to individuals. The business focuses on selling unit trusts and OEICs together with other packaged products in a variety of wrappers such as ISAs and pensions. The company was founded over 20 years ago and is based in Beverley, East Yorkshire. The company utilises the Cofunds platform and currently has approximately £200 million of assets held under administration for clients. In addition, the company also administers approximately £175 million of other assets within collectives, held either in clients own names or through other investment management platforms.
For the year to 31st March, 2007, Garrison’s revenues on an unadjusted basis were approximately £2.7 million and profits before tax were £63,000. Taking account of certain adjustments that will be made post acquisition, including a significantly different format for remuneration, pro forma revenues and profits before tax for the year to 31st March, 2007 were approximately £2.35 million, and £1.15 million respectively.
Commenting on the acquisition, the Chairman of Charles Stanley, Sir David Howard said: “Garrison, with its well-established name, is an excellent fit for the range of services offered by Charles Stanley. Strategically this is a further expansion for us into the strongly growing execution only area of the market. There are considerable synergies for Charles Stanley Group Plc in relation to the cross marketing of all our SIPP, PEP / ISA, OEIC and execution-only services to the client base of Garrison.”
John Duerden, chairman of Garrison, said: “We are very excited at joining Charles Stanley. This opens significant further opportunities for developing Garrison, and for offering an even broader range of services to our valued clients.”
The existing senior management team comprising of John Duerden, John Shires and Colin Campbell will remain on the board of Garrison Investment Analysis Limited together with representatives from Charles Stanley & Co Ltd.
