L&G Completes Acquisition of Cofunds Platform

RNS Number : 3778F

Legal & General Group Plc

23 May 2013

 



Press Release

23 May 2013

Legal & General completes acquisition of cofunds platform

Legal & General Group Plc ("Legal & General") has now completed the acquisition of Cofunds Holdings Limited ("Cofunds"). Legal & General's Savings business now has assets under administration (AUA) of £110bn¹ as at 31 March 2013.

The intention to acquire the remaining 75% of the share capital which Legal & General did not already own² was announced to the market on 26 March 2013³. The acquisition valued Cofunds at £175m, and Legal & General paid a cash consideration of £131m.

Legal & General has identified digital solutions as one of its five key drivers of growth. The acquisition provides Legal & General with scale and distribution in the investment platform market. Cofunds is the UK's largest investment platform for financial services and at 31 March 2013 had AUA of £52bn, and a 20%⁴ share of the UK investment platform market.

The transaction is expected to be earnings accretive by the end of 2014 with an expected cost synergy benefit of £11m per annum from 2015, with a one-off investment cost of around £17m. 

Cofunds will retain its focus as a whole of market platform, serving both retail and institutional clients with its competitive charging structure. It will remain a separate brand in the UK investment platform market.  The clarity of a single ownership structure will enable Cofunds to grow assets and revenues whilst achieving operational leverage with a more efficient cost base.

For further information from Legal & General, please contact:

Investors:
Kate Vennell	Head of Investor Relations	020 3124 2150
Ian Baker	Investor Relations Manager	020 3124 2047
Media:
John Godfrey	Group Communications Director	020 3124 2090
Richard King	Head of Media Relations	020 3124 2095
Michelle Clarke	Tulchan Communications	020 7353 4200
Katharine Wynne	Tulchan Communications	020 7353 4200

Notes:

1.	The £110bn AUA is made up of Legal & General Savings AUA of £74bn and Cofunds
	£52bn, less £16bn of Legal & General AUA within the Cofunds total assets.
2.	Prior to the acquisition Legal & General was the largest shareholder in Cofunds with a holding of 25%.
3.	http://investor.legalandgeneral.com/releasedetail.cfm?ReleaseID=750933
4.	Fundscape Platform Report, May 2013 (market share by AUA)
5.	Cofunds
	Established in 2001, Cofunds is the leading investment platform for advisers and other financial institutions, with AUA of £52bn as at 31 March 2013.  It provides flexible administration and management services for advisers and their clients as well as dealing and custody services for financial institutions.  Cofunds exists to serve the needs of institutions, advisers, their clients, and fund managers.  Cofunds is authorised and regulated by the Financial Conduct Authority.
6.	Legal & General Group Plc
	Established in 1836, Legal & General is a leading provider of protection, annuities, savings and investment management products in the UK, with a market capitalisation of £11bn (as at 22 May 2013). In its recent 2012 preliminary results earnings per share were up 12% to 13.90p and dividends per share up 20% to 7.65p for the period. Legal & General's return on equity for 2012 was 15.5%.
	The Group has 7 million retail customers in the UK for life assurance, pensions, investments and general insurance plans.
7.	Legal & General was advised by Fenchurch Advisory Partners and Cofunds' shareholders were advised by Evercore Partners.

Forward looking statements

Nothing in this announcement should be construed as a profit forecast.  In particular, statements that the transaction will be earnings accretive are not, and do not constitute, a profit forecast and should not be interpreted to mean that Legal & General's or Cofunds' earnings following the transaction will necessarily match, or be greater than, the historical published earnings of Legal & General or Cofunds.

This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.

 

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