Channel Islands-headquartered Ravenscroft is expanding to the Isle of Man with the acquisition of WH Ireland’s subsidiary.
The deal comes after WH Ireland issued a profit warning in February 2019 and, in a trading update in early April 2020, said it expected to report an operating loss of £2.2m ($2.7m, €2.4m) for the year ending 31 March 2020.
“In response to these circumstances, the board has already undertaken a number of additional decisive actions across the business to reduce costs and more closely align the cost base to the levels of revenue generation we are currently seeing,” WH Ireland stated in April 2020.
No reference was made to a sale at that time.
On 29 June, it was announced that investment services company Ravenscroft has entered into a conditional agreement to acquire 100% of the issued share capital of WH Ireland (IOM).
At midday, the share price of WH Ireland was down 5.17% at £0.4125.
The subsidiary was opened in 2014 and provides investment management services to a “diverse international client base” and contributes roughly £1.2m of annual revenue.
Asset under management stood at £353m as of 25 June 2020, the firm said.
If approved by the Isle of Man Financial Services Authority; a cash payment of £250,000 will be made on completion, plus a deferred payment of up to £412,500 depending on the ongoing trading of the office.
Just prior to completion, WH Ireland will receive repayment in full of an intra-group subordinated loan it provided to the Isle of Man operation, worth £985,000, and a further intercompany loan repayment of £160,000.
WH Ireland chief executive Philip Wale described the sale as “streamlining [the firm’s] wealth management operations into a smaller number of integrated, larger locations focused on delivering high-quality service to our private clients”.
“The disposal of the Isle of Man subsidiary will continue this process whilst freeing up capital and management resources to focus on and invest in growing the core wealth management business and returning it to profitability.”
Following the sale, the company will “concentrate on the UK market”, Wale added.
Ravenscroft is listed on The International Stock Exchange (Tise) and has offices in Guernsey, Jersey and the UK.
It serves both institutional and private clients and has £7.45bn in assets under administration.
The six WH Ireland (IoM) employees will join its already 120-strong workforce.
The subsidiary will be rebranded Ravenscroft (IOM).
It marks the first foray by Ravenscroft into the Isle of Man, having entered the UK market in 2015.