The parent company of financial advice firm Saunderson House and pension platform James Hay is being sold to private equity company Epiris for £206m ($272m, €240m).
The offer, which works out at 193p per share, will see SaintMichelCo (Bidco), a wholly-owned subsidiary of Epiris, acquire the entire share capital of IFG Group.
This deal comes a year after IFG put Saunderson House up for sale, only for it to be pulled off the market in April.
Kathryn Purves, chief executive of IFG, said: “We are pleased to be announcing this transaction today and believe it is an excellent outcome for shareholders, for the company, and for our clients.
“The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG today.
“In addition, our employees and clients will benefit under the ownership of Epiris which should help accelerate the delivery of IFG’s strategic objectives and the underlying strategies of James Hay and Saunderson House.”
Acquisition details
The deal will be implemented by means of a High Court sanctioned scheme of arrangement.
It is conditional on the approval by IFG shareholders, the sanction of the scheme and the confirmation of the reduction of capital by the High Court and receipt of required regulatory and other necessary approvals.
Epiris believes that “under private ownership and supported by Epiris’ expertise in the sector, James Hay and Saunderson House will be better able to capitalise on potential opportunities within their core markets”.
The first half of 2018 was a tumultuous time for IFG following the aborted sale of Saunderson House.
Announced in February, IFG stated that it had received “several unsolicited approaches” and determined that selling Saunderson would create “greater value for shareholders”.
But the advice firm was pulled off the market in April, with the group setting up a £3m loyalty bonus scheme to retain adviser talent.
The U-turn also saw group chief executive John Cotter and chair John Gallagher swiftly exit the business.
In May, IFG confirmed that the firm’s brief spell on the market would hit future client acquisitions.
Financial results
The acquisition was announced within IFG’s end of year results, published on 25 March 2019.
| James Hay results | 2018 | 2017 |
| Assets under administration | £25.3bn | £25.5bn |
| New clients | 4,651 | 6,116 |
| Total clients | 58,753 | 58,551 |
| Retention rate | 93% | 93% |
| Adjusted operating rate | £10.3m | £6.1m |
It was, however, affected by weaker investment markets and a decline in defined benefit (DB) transfer volumes, which reduced new business volumes compared to the prior year.
The firm said James Hay had an increase in revenue in 2018, driven by pricing changes in 2017 and an increase in margin on cash as interest rates have risen.
The results also said that £4.9m had been set aside for potential sanctions by HM Revenue and Customs over issues with James Hay’s legacy dual trustee book.
| Saunderson House results | 2018 | 2017 |
| Assets under advice | £4.9bn | £5.1bn |
| New clients | 239 | 247 |
| Total clients | 2,342 | 2,121 |
| Retention rate | 99% | 96% |
| Adjusted operating rate | £7.1m | £8.6m |
IFG said: “During 2018, Saunderson House was required to manage through a sale process which was subsequently cancelled, creating a degree of disruption for both clients and employees.
“Despite this, the business has performed strongly during 2018, demonstrating the strength of its relationships with clients, its brand, service and investment proposition.”
