Brewin Dolphin Holdings PLC
30 November 1999
Not for distribution or release in or into the United
States,
Canada, Japan or Australia
Brewin Dolphin Holdings plc - £12 million acquisition of
private client stockbroking business and placing of
ordinary shares
The Board of Brewin Dolphin Holdings plc ('Brewin
Dolphin') is pleased to announce that the company has
exchanged contracts with Williams de Broe Plc, a member
of the ING Group, to acquire a part of its London based
private client stockbroking business, which in the year
ended 31 December 1998 generated turnover of some £3.2
million. 11 fund managers and 5 other staff have agreed
to join Brewin Dolphin. They have operational
responsibility for funds under management of some £400
million, the majority of which are discretionary, to
which the agreement with Williams de Broe relates. No
material tangible assets are being purchased.
The total initial acquisition cost will be approximately
£12 million, payable to Williams de Broe plc and the fund
management team. It is intended that the initial
acquisition cost will be largely funded by a placing of
up to 1.56 million new ordinary shares for cash, arranged
by Brewin Dolphin's brokers, HSBC, to raise up to £11.4
million, and HSBC have agreed to use reasonable
endeavours to procure placees for such shares. The
balance of the consideration to be funded out of Brewin
Dolphin's existing cash resources. An additional
deferred consideration of up to £3 million is payable to
the fund management team on the achievement of certain
profit related targets. Brewin Dolphin anticipates
satisfying this deferred consideration by the issue of
new ordinary shares but, at its election, can choose to
pay cash. If it elects to issue ordinary shares in
settling the deferred consideration, which is payable in
2002, the number of shares to be issued will be
determined by the market price at the time of issue,
subject to a minimum of £5 per ordinary share.
The fund managers and employees of Williams de Broe
joining Brewin Dolphin will acquire some 180,000 existing
Brewin Dolphin ordinary shares, with a current market
value of approximately £1.3 million; they will agree to
retain these shares for a period of 3 years.
The acquisition continues Brewin Dolphin's strategy of
growing its core private client stockbroking business
organically and through acquisition. Clients will
migrate onto Brewin Dolphin's systems following
completion of the acquisition, which is anticipated in
early January 2000. The transaction is expected to be
earnings per share enhancing in the current financial
year.
Application has been made to the London Stock Exchange
for the listing of the new ordinary shares to be issued
pursuant to the placing and it is expected that dealings
will commence on 7 December 1999. The placing shares
will rank pari passu in all respects with Brewin
Dolphin's existing ordinary share capital. In the event
that the acquisition fails to complete, Brewin Dolphin
will use the proceeds of the placing to fund continuing
organic growth.
Enquiries:
John Hall
Managing Director
Brewin Dolphin Holdings Tel: 0171 248 4400
Bob Gregory
Bell Pottinger Financial Tel: 0171 353 9203
HSBC Investment Bank, which is regulated in the United
Kingdom by the Securities and Futures Authority Limited,
is acting exclusively for Brewin Dolphin Holdings plc and
for no-one else in connection with the placing and as
sponsor in connection with the application for admission
to the official list of the placing shares and will not
be responsible to anyone other than Brewin Dolphin
Holdings plc for providing protections afforded to
customers of HSBC Investment Bank nor for providing
advice in relation to the placing or in relation to the
contents of this press release or any transaction or
arrangement referred to herein.