Jersey-based wealth and asset management business Team has acquired JCAP for up to £2.95m ($4.09m, €3.44m).
The firm trades as JCAP Treasury Services, is also based in the Channel Island and provides cash management services to institutions, professional advisers, trustees and high net worth individuals.
It has over £1.3bn in assets under advice.
Team will pay a net consideration of up to £2.95m, of which just over £2.2m will be paid in cash and £737,499 in newly issued Team shares.
The net tangible assets of the business, valued at around £700,000, are being acquired on a pound-for-pound basis in addition to the total consideration, Team said.
At completion, the wealth manager will pay around £1.66m in cash; and a deferred consideration payment of up to £735,500 will be paid by March 2022, depending upon JCAP meeting certain performance targets by December 2021.
The sum will be made up of up to £553,125 in cash and £184,375 in Team shares.
Acquisition pipeline
Mark Clubb, executive chairman of Team, said: “At the time we listed, we told our shareholders that we had a well-researched and solid acquisition pipeline and that we would work through that pipeline with rigour and focus.
“The acquisition of JCAP is the first evidence of that. We continue to execute on our acquisition strategy as well as develop more accretive opportunities.
“JCAP is a natural fit with our plans for the development of Team. Cash management is a complementary service for many of our current and future clients, and JCAP is the leading provider of these service in the Channel Islands.
“We are currently in a period of historically low interest rates where yield optimisation on cash balances generates minimal returns.
“Against this market background, JCAP is a highly profitable business, and if interest rates increase, as seems likely, this will add significant momentum to profits as clients seek out JCAP’s services to improve returns and risk management on their and clients’ cash holdings.”
