Proposed Acquisition of FFP (Holdings) Limited

JTC PLC

18 June 2024

 

18 June 2024

For immediate release

JTC PLC

(the "Company" and together with its subsidiaries "JTC" or the "Group")

Proposed Acquisition of FFP (Holdings) Limited ("FFP")

Acquisition of a leading provider of specialist fiduciary services to fund, trust and corporate clients

JTC, the global professional services business, is pleased to announce the proposed acquisition of FFP, a provider of specialist fiduciary services to fund, trust and corporate clients with a leading position in complex engagements including restructurings, insolvencies and disputes, for a maximum consideration of $110.0 million (the "Acquisition").

The total consideration of $110.0 million will be satisfied as follows:

·      $70.0 million initial consideration comprising $56.0 million in cash and $14.0 million in new JTC ordinary shares; and

·      A further earn-out of up to $40.0 million will be payable in cash and JTC ordinary shares on the achievement of specific performance targets for the period ending 31 December 2024.

The Acquisition remains subject to final regulatory approvals and satisfaction of other customary closing conditions and will be funded from the Group's cash reserves and existing debt facilities.

Background to FFP

Founded in 2012, FFP is privately owned and headquartered in the Cayman Islands, with further offices in the BVI and Dubai. The business provides a range of specialist fiduciary, restructuring, trustee, fund administration and corporate services to clients across the globe, with a focus on complex engagements. FFP has established a strong reputation and differentiates itself as a leader in its chosen markets through a focus on providing innovative and tailored solutions, drawing on the unique multi-disciplinary skill set of its experienced and highly regarded team.

Strategic Rationale

Broadens JTC's scope of expertise and forms a core pillar of new Governance Services proposition

JTC's Commercial Office has been actively working on the establishment of a Governance Service practice. The Acquisition of FFP forms part of this strategic initiative focused on the provision of a suite of specialist services designed to ensure effective management, oversight and decision-making within the Group's client base.

The Acquisition enhances and differentiates the range of fiduciary services JTC can offer to existing and new clients, serving to expand the Group's overall addressable market. FFP has particular expertise in resolving situations that require practitioners with specific trust, fiduciary, restructuring or insolvency experience. These mandates often require longer term provision of complementary corporate services (including registered office and agent facilities, corporate secretarial and regulatory reporting services) or fund administration services for the associated vehicles.

Cements JTC's leadership position in the Cayman Islands

The Cayman Islands is one of the leading global financial jurisdictions for the funds and trust markets. JTC first established a presence in the Cayman Islands in 2013 and is already one of the leading professional services firms in the jurisdiction. Post acquisition, the Group will be represented by an enlarged team of over 80 professionals and will be differentiated in the market through its unique and complementary range of services that span the full length of the asset lifecycle and its diverse range of institutional and private clients.

JTC's global platform will serve to accelerate FFP's growth prospects

The combination will allow FFP to leverage JTC's existing infrastructure and global network across the largest and most significant jurisdictions for the funds and trust markets and accelerate its geographic expansion beyond its current footprint to capitalise on demand for its specialist services.

FFP is a leader in its chosen markets, with a highly skilled, multi-disciplinary workforce led by an experienced management team

FFP has established a strong reputation and market leadership position in its chosen markets. The senior management team at FFP will remain with JTC and all have 15+ years of experience in handling complex fund and trust situations. The senior team are supported by a well-qualified workforce of practitioners with a complementary range of skill sets across the funds, trust and corporate services space.

Financial Benefits of the Proposed Acquisition

FFP's strong margins and cash conversion will bolster the overall financial profile of JTC. The Acquisition will be accretive to Group margins and to EPS in 2024 and will deliver high-single digit accretion to EPS in 2025. Post completion of the Acquisition, JTC's leverage position will remain below 2.0x net debt / underlying EBITDA for the year ended 31 December 2024, in line with the Group's well-established medium-term guidance and providing headroom for further acquisitions, with the Group's continued growth and strong cash generation driving significant deleveraging going forwards.

FFP delivered a three-year revenue CAGR of ~9% over the period ended 31 December 2023.

For the year ended 31 December 2023, FFP generated revenue of $30.7 million (£24.2 million[1]) and adjusted net income of $16.9 million (£13.3 million). The gross assets of the subject of the transaction are $16.0m as at 31 December 2023 (£12.6 million).

Nigel Le Quesne, CEO of JTC, said:

"We are excited to welcome the whole FFP team to the JTC family. FFP has an excellent reputation and significant subject matter expertise with strength in depth across the team. We believe that access to JTC's global platform will accelerate FFP's growth prospects with substantial opportunities across the Group as we develop our Governance Services business line. The combination of our businesses will cement our leading position in the Cayman Islands, which is one of the pre-eminent financial jurisdictions globally. As always, cultural alignment is key and, like JTC, FFP consistently invests in its people and capabilities." 

Michael Pearson, Co-Founder and Partner of FFP, said:

"We are really grateful for the support of our team, clients and legal contacts who have championed us over the last decade. With their backing, FFP has been able to help lead and change the way stakeholders approach complex and demanding situations in our markets. The speed of change and increasing globalisation of financial services means that well-invested infrastructure and a broad network are increasingly important. Joining the JTC Group provides us with access to a global platform that encompasses all key financial centres and we are relishing the prospects and opportunities this creates. That Nigel and team have astutely developed and led JTC for over 30 years was a very important factor for us in coming onboard."

For further information please contact:

JTC plc	Tel: [phone]
Nigel Le Quesne, Chief Executive Officer
Martin Fotheringham, Chief Financial Officer
David Vieira, Chief Communications Officer	Tel: [phone]
Camarco (Financial PR)
Geoffrey Pelham-Lane	Tel: [phone]
Sam Morris	Tel: [phone]
Charles Dingwall	Tel: [phone]

About JTC

JTC is a publicly listed, global professional services business with deep expertise in fund, corporate and private client services. Every JTC person is an owner of the business and this fundamental part of our culture aligns us with the best interests of all of our stakeholders. Our purpose is to maximise potential and our success is built on service excellence, long-term relationships and technology capabilities that drive efficiency and add value. 

www.jtcgroup.com

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[1] GBP:USD exchange rate of 1.2678;  Source: Bloomberg (18 June 2024)

 

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