Sanne, a provider of outsourced corporate, fund and private client administration, reporting and fiduciary services, is to acquire International Financial Services and IFS Trustees for a total consideration of approximately USD127.3 million (GBP101.9 million).
The IFS Group is a Mauritius-based provider of fund and corporate administration services to corporates and alternative asset managers. Founded in 1993, the IFS Group provides services to more than 1,000 global entities, and has assets under administration in excess of USD82 billion.
The IFS Group has a large existing revenue base across funds and corporate structures for investment into India and Africa. It has a largely institutional client base, with a high concentration of assets under administration being funded from the US or Cayman.
It reported operating profit of USD18.4 million in 2015 at an operating profit margin of circa 65 per cent and operating cash conversion of circa 100 per cent.
Mauritius is one of the leading international financial centres for foreign investment into Africa and India. This acquisition provides Sanne with a significant platform from which to expand the group’s exposure to the emerging markets and to clients looking for support with their emerging markets structuring requirements. The IFS Group will form the core of a standalone division operating as Sanne’s new emerging markets-focused platform.
The consideration for the acquisition will be satisfied through a payment of approximately USD91.1 million (GBP72.9m) in cash, which will be financed through the net proceeds of a capital raising, and the issue of approximately 5.8 million consideration shares, representing approximately 4.1 per cent of the group’s enlarged share capital following completion of the capital raising and completion.
The acquisition is expected to be immediately earnings enhancing. It is conditional upon, among other things, Sanne shareholder approval, receipt of proceeds from the capital raising and regulatory clearance, and is expected to complete in Q1 2017.
Dean Godwin (pictured), chief executive officer of Sanne Group, says: “This acquisition enables Sanne to further realise its ambition of building a leading, global business. The IFS Group is highly profitable, with a service offering and client base extremely complementary to Sanne’s. Mauritius is one of the leading international financial centres for foreign investment into Africa and India and this transaction provides us with a significant platform to both support clients in these attractive regions and grow our emerging markets presence. I am delighted to welcome the IFS Group team to Sanne and we are excited about the opportunities to come.”
Couldiplall Lala, founder director of the IFS Group, says: “We are extremely proud of the business that we have established over the past 20 years and, whilst Sanne is a large organisation with global reach, they share many similarities with our business, in particular the value they place on client service. We look forward to being an integral part of the next phase of growth.”
SANNE Group was advised by MCB Capital Markets, the investment banking arm of MCB Group.