Rathbones Group PLC (LSE:RAT, OTC:RTBBF) synergy and earnings-per-share (EPS) targets are “certainly achievable,” said Barclays, after the wealth manager announced it would be acquiring Investec’s UK arm.
The company is aiming to deliver synergies of £60mln, of which £18mln will be derived from technology consolidation, £10mln from net interest income due to the migration of clients onto Rathbone’s platform and £32mln from other operations.
A quarter of those synergies should be recognised in the first year, the bank said, while it should achieve 90% of synergies by the third year.
Barclays also noted that the first full year should see EPS accretion, while the third year should see low-teens accretion and a double-digit post-tax return on capital invested.
Rathbones today announced the combination with Investec Wealth & Investment to create the UK’s leading discretionary wealth manager.
The all-share deal will see Rathbones remain an independent listed company with Investec as a long-term, strategic shareholder.
The merger, which values Investec W&I UK at £839mln, will see Investec Group take a 41.25% stake in Rathbones with voting rights limited to 29.9%.
The enlarged group will have around £100bn of funds under management and administration.