AssetCo PLC (AIM:ASTO), the wealth management company led by Aberdeen AM co-founder Martin Gilbert, has agreed to buy SVM Asset Management PLC (LSE:SVM) for cash and convertible loan notes.
The deal is worth about £10.7mln, with £1.7mln to be paid in cash. The remainder will be paid by the issue of £9mln 1% fixed rate unsecured convertible loan notes in AssetCo.
The loan notes may be converted into fully paid ordinary shares of 10p each in the company at an effective issue price of £14.50 and will be repaid on 31 December 2023 if not converted.
SVM is an Edinburgh-based fund management business which currently has £586mln in assets under management (AuM), including in its listed investment trust the SVM UK Emerging Fund PLC, and generated a profit of £2mln in the last financial year.
It will “spearhead AssetCo’s plans to have a significant asset management hub in Edinburgh,” the company said, adding to Saracen Fund Managers and Revera Asset Management also in the Scottish capital.
Upon completion, Colin McLean, managing director and chief investment officer of SVM, will become a director of AssetCo’s Scottish business.
The deal is expected to complete in September and is subject to Financial Conduct Authority approval.
Margaret Lawson, who co-founded the company in 1990, will continue in her role managing UK equity portfolios.
Gilbert and several board members at AssetCo will join the SVM board to “support the continued growth of SVM and AssetCo’s Scottish business,” according to a statement.
“SVM is a well-regarded fund management firm, with a recognised investment style and a very strong investment track record,” said Gilbert, who is chairman of AssetCo.
“Its business model, people and product offering are its key assets, and it is core to AssetCo's ambitions”, Gilbert added.
AssetCo believes the acquisition will improve its Scottish and UK brands, as well as complement its own existing funds.
The London-listed firm will have £3.5bn in AuM upon completion.