Brooks Macdonald has bought Jersey-based wealth manager DPZ Capital through a subsidiary for a potential £13m, including £2.7m in shares.
The Aim-listed wealth management firm has agreed to pay £3m in cash and the £2.7m of shares initially, with the price increasing if DPZ’s assets under management remain within the group.
The deal has been made through Jersey-based Brooks Macdonald International using the company’s spare cash.
Founded in 2007, DPZ has about £430m in funds under management, with the lion’s share on a discretionary basis, £60m in advice and £10m execution only.
The combined group’s assets under management will be boosted to £6.04bn.
Brooks Macdonald chief executive Chris Macdonald says the acquisition expands the firm’s existing international business, which is also based in Jersey.
“DPZ is a high quality asset management business that has strong investment management and cultural synergies with the group,” he says.
“As well as adding scale to our international business DPZ bring a highly talented investment management team and additional skills to expand our offering.”
Brooks Macdonald says the DPZ acquisition will boost Brooks Macdonald International’s growth rate and capacity.
It will increase the firm’s Channel Islands discretionary funds by half again and pave the way for a new fixed income offering and the expansion of DPZ’s International MPS platform.
DPZ Capital chief executive Darren Zaman hopes the combined firm will be better positioned for its clients.
“We believe that by combining with BMI we will become part of the leading investment management business in the Channel Islands and look forward to contributing to a strong and fast-growing international investment business that will bring many benefits to our clients and staff,” he explains.
Further to the initial payment totalling £5.7m, Brook Macdonald will pay another £2.4m in cash in October. A further payment will be made in May 2016, depending on DPZ’s assets. The company’s net current assets of about £1.2m to £1.3m will also be paid to the former owners of DPZ.
The shares issued for the deal are priced at 1706.4p.