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Alliance Trust Savings acquires Stocktrade from Brewin Dolphin

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Alliance Trust Savings (ATS) is to acquire Brewin Dolphin’s execution-only stockbroking business Stocktrade. 

The proposed acquisition would add more than 48,000 new customers and GBP4.6 billion of new assets into ATS across three main channels; direct customers, intermediary customers and strategic partnerships.

The acquisition of Stocktrade has the potential to significantly increase ATS’ assets from GBP7.2bn to over GBP11.5bn and ATS’ customers from 57,000 to over 105,000. This will enable ATS to drive further economies of scale as both businesses offer similar products and services to a complementary customer base.

The increased scale and access to new customers, combined with attractive cost and revenue synergies, will strengthen ATS’s position in the rapidly expanding and increasingly competitive UK platforms market.  In addition to the platform business, Stocktrade also brings a strategic partnership channel with established relationships and existing management capability, enabling ATS to expand its distribution capability. The strategic partnerships channel consists of four main areas:

Pension providers – telephone and online share dealing services to their underlying SIPP clients

Building societies – offering both a telephone and online share-dealing service to their customers

Company share schemes – primarily relates to share-dealing and custody services for companies offering share dealing to employees, or to services provided to Share Plan administrators and their clients

Corporate ISAs – an ISA share-dealing service for employees of both US and UK companies

The transition of the business to the ATS platform will provide all customers with access to a high quality online automated platform supported by an award winning service team. The parties are working together to ensure a smooth transition for all customers to the ATS platform. 

Alliance Trust Savings will fund the acquisition price and additional associated regulatory capital of up to GBP8m in cash via an injection of equity from its parent, Alliance Trust PLC. Completion of the transaction is expected to take place towards the end of the third quarter of 2015.

Patrick Mill, Managing Director, ATS, says: “We are really excited about this acquisition. It demonstrates ATS’ commitment to our ambitious growth strategy by extending our impact and adding value for the long term, with immediate effect. Our proposition, trusted brand, high levels of customer service and ability to respond to changing customer needs have enabled us to grow our business profitably. Already this year we’ve grown assets organically by 12% and this acquisition takes us to over GBP11.5bn in assets under administration.

“Stocktrade is a great strategic fit for ATS, giving us access to new customers, an increase in assets and the opportunity to build a strategic partnership capability. It also gives us the ability to align a traditional stockbroking business with our innovative, scalable and cost-effective approach by offering customers online access alongside our in-house customer service team. Our priority now is to focus on driving growth organically and profitably through the three channels, direct, intermediaries and strategic partnerships.”

Katherine Garrett-Cox, Chief Executive, Alliance Trust, says: "Alliance Trust’s strategy is built on creating long-term and valuable relationships with our shareholders and customers. As set out in our vision 2020, our objective is to become the UK’s most trusted investment and savings business. Over the last couple of months we have received a lot of valuable feedback from our shareholders.  We are currently analysing that feedback and we will update shareholders further at our interim results in July.

“Our strategy for ATS is to grow the business organically, but when appropriate acquisition opportunities present themselves that fit with our stringent criteria then these will be assessed. The acquisition by ATS of Stocktrade is an example of us putting this strategy into action and pursuing our ambitious growth targets.”

David Nicol, CEO of Brewin Dolphin, says: “The sale of Stocktrade is a good result for shareholders, customers and colleagues. It is consistent with our strategy of streamlining and simplifying our business and will further enhance shareholder value by allowing us to continue to focus on growing our core wealth management service.

“We believe Stocktrade customers and colleagues will benefit from being part of an organisation that will provide further investment and enhancement of Stocktrade’s service.”

As part of the transaction the Divisional Directors responsible for Stocktrade, Graham Swan and Nicholas Pearson, will stay with the business in senior management roles. The existing Stocktrade team in Edinburgh will be transferring across to ATS upon completion, thus ensuring continuity of service for clients.

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