Inter-dealer broker TP ICAP PLC (LON:TCAP) is to acquire Louis Capital Markets and MidCap Partners, a private brokerage group specialising in equities and fixed income.
The initial consideration for the acquisition is US$21mln in cash with a deferred non-contingent consideration of US$6mln that will be paid over two years.
There is a further US$17mln of deferred contingent consideration that may be payable dependent upon the performance of the business over three to five years. Finally, there is a potential additional consideration via a profit share dependent upon the performance of the business. These subsequent payments will be satisfied through cash payments.
TP ICAP expects the acquisition to enhance earnings from the first year of acquisition on an underlying basis and from the second year on a reported basis.
In 2018, Louis Capital made a profit before tax of US$4.3mln. At the end of 2018, it had gross assets of US$35.4mln.
“Louis Capital's strong brand and breadth of equity, equity derivatives and fixed income products complement our existing offering and strengthen TP ICAP's position in Continental Europe," said Nicolas Breteaue, the chief executive officer of TP ICAP.
Shares in TP ICAP were up 0.6% at 414.53p in early deals.