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Brewin Dolphin raises £60mln as it strikes deal to buy Investec’s Irish wealth management business

The acquisition will help strengthen Brewin’s asset base during a tough period for wealth managers, which have been hit by investor caution amid global political and economic uncertainties

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The tie-up will create Ireland’s third-largest wealth manager

Brewin Dolphin Holdings PLC (LON:BRW) has announced plans to raise £60mln after bosses struck a deal to buy the Irish wealth management arm of Investec for £35mln (€40mln).

Last month, Brewin revealed it was in exclusive talks with Investec over the acquisition.

READ: Brewin Dolphin in talks to buy Investec’s wealth management business

A price of up to £52mln (€60mln) had been mooted in the press, but the UK investment group confirmed today (Friday), it will pay a net consideration of £38mln (€44mln).

Once the deal goes through, Brewin will have the third-largest wealth management business in Ireland and will take its total funds under management to almost £45bn.

The new business is expected to contribute around £3.9mln (€4.5mln) to Brewin’s bottom line in its current financial year to the end of next March.

£60mln fundraise

“This acquisition, which is consistent with our strategy of growth in assets under management, provides us with an exciting opportunity to strengthen substantially our existing presence in the Republic of Ireland, one of Europe's fastest growing economies,” said chief executive David Nicol.

“We will also be in a stronger position to benefit from the country's growing demand for discretionary and advice-led services, supported by favourable demographics, with the country having the youngest population in Europe.”

To help fund the deal, Brewin Dolphin, which has acquired five other businesses over the past year, is to ask institutional investors for £60mln.

It plans to sell shares at 305p – a 5% discount to Thursday’s closing price of 321p – and the placing is expected to complete by close of play today.

First-half profits fall

In a separate announcement, Brewin reported a 13% fall in pre-tax profit to £29.7mln in the six months ended 31 March (H1 18: £34.1mln).

Total income was broadly flat at £162.3mln (H1 18: £161.8mln), due to largely flat average funds over the period. Total funds fell to £42.4bn, down from £42.8bn six months earlier.

“In the first half of 2019, the group has continued to deliver strong and resilient organic growth, even with the backdrop of volatile market conditions,” said CEO Nicol.

Brewin shares were down 3.1% to 311p in early deals on Friday.

Quick facts: Brewin Dolphin

Price: 251 GBX

LSE:BRW
Market: LSE
Market Cap: £761.11 m
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