JTC Plc (LON:JTC), an award-winning provider of fund, corporate and private wealth services to institutional and private clients, has today announced that it has entered into a conditional agreement to acquire Minerva from Dome Management Limited and Dome Management SA.
Minerva is a provider of private client, corporate, fund and treasury services with a track record spanning more than 40 years and is headquartered in Jersey, Channel Islands.
The acquisition will add a new office to JTC’s global network (Dubai, United Arab Emirates) and increase scale in five of its existing locations: Jersey, London, Geneva, Singapore and Mauritius. In addition, it will extend JTC’s reach in the markets of sub-Saharan Africa, India and Asia and will grow and enhance JTC’s treasury services offering.
The principal managers of Minerva, who also have ownership interests in Minerva, Mr Vipin Shah, Mr Umesh Sahai, Mr Neel Sahai and Mr Steven Bowen, will join JTC at completion.
The consideration for the Acquisition is made up of an initial element and an earn-out element. The initial consideration payment is expected to be £28 million based on an underlying proforma LTM EBITDA at the time of acquisition of £3.5m and revenue of £13m. This will be 60% payable in cash and 40% will be satisfied by the issue of new JTC shares (“Consideration Shares”). The earn-out (if payable) would be paid in cash during 2019 and is based on Minerva’s performance in the six months following completion and will be based up achieving a revenue target and minimum EBITDA margin of 30%. The total consideration payable is subject to an absolute cap of £30 million (subject to customary closing adjustments).
The share consideration payable as part of the initial consideration will be calculated with reference to JTC’s average five day middle market closing share price immediately preceding signing. The Seller will be subject to certain restrictions which lock-in the Consideration Shares for a maximum of two years. The cash consideration will be funded through JTC’s operating cash flows and debt facilities.
In the year ended 31 December 2017, Minerva made underlying EBITDA of £2.5 million and had gross assets of £12.5 million. The Company expects the transaction to be immediately earnings enhancing and it consistent with the JTC’s strategy to use its existing scalable platform to enhance operating margins. Completion, subject to regulatory approvals, in or around November 2018.
The acquisition is part of the Company’s growth strategy outlined at the IPO in March 2018 and as referred to in the trading update issued on 23 July 2018. The Company continues to see a healthy pipeline of additional acquisition opportunities as well as good prospects for further organic growth.
Nigel Le Quesne, CEO of JTC PLC, said: “We are delighted to announce this important acquisition. Minerva has a long track record with particular strength in the private client sector and the markets of Africa, Asia and the Middle East. There is a clear fit with our existing operational footprint and client base and this will allow us to leverage our scalable global platform to enhance operating margins as well as to drive future growth. There is also strong cultural alignment, with a focus on client service excellence, and I am pleased that the founders and leaders of the business will continue to be directly involved post completion. We extend a warm welcome to our new colleagues, clients and partners and look forward to working with them as part of an enhanced JTC.”
Vipin Shah, Chairman and Founder of Minerva, said: “I am delighted with this deal, which is an important step in the development of Minerva, and we look forward to working closely with the highly experienced teams at JTC to further enhance our offering. The founders and the senior management team remain shareholders, having taken part of our consideration in shares, and are committed to continuing the work we have been doing for the last 40 years. We have recognised the increasing importance of scale in our industry and, being part of a larger and more global business, will enable us to access an extensive range of additional services from across the JTC Group. Going forward, this will add value to our clients and will help us to continue to meet the ever increasing global service requirements from them.”
2018 Interim Results
JTC will announce its interim results for the six months ending 30 June 2018 on Tuesday 18 September 2018.
