Wednesday 22 June 2022

UK-based asset and wealth management company AssetCo (AIM: ASTO) has reached agreement to acquire the entire issued share capital of SVM Asset Management Holdings Ltd., the holding company to SVM Asset Management Ltd, for a total consideration of approximately GBP 10.7m (13.12m), the company said.

The consideration will be satisfied by the issue of up to GBP 9m 1% fixed rate unsecured convertible loan notes in AssetCo and, subject to balance sheet adjustments, approximately GBP 1.7 m in cash, in each case to be paid on completion of the acquisition.

The loan notes may, at the option of the company or a majority of the holders of the Loan Notes, be converted into fully paid ordinary shares of 10p each in the company at an effective issue price of GBP 14.50 per ordinary share.

Unless converted the loan notes will be repaid on 31 December 2023.

The acquisition is conditional on, inter alia, approval by the FCA to a change in controller which is expected to occur by the end of September 2022. The company will provide further updates, as appropriate.

SVM is an independent, FCA regulated fund management business based in Edinburgh, which was founded in 1990 by Colin McLean and Margaret Lawson, whom, together with a family trust, are the significant majority owners.

SVM currently has around GBP 586m of assets under management, including five open-end funds: UK Growth, UK Opportunities, Continental Europe, All Europe SRI and World Equity.

SVM also manages SVM UK Emerging Fund plc, a GBP 6.8m investment trust listed on the London Stock Exchange.

SVM generated turnover of GBP 4.3m and a profit before taxation of GBP 2m for the financial year ended 31 December 2021 and had net assets of GBP 14m as at 31 December 2021.

Post a restructuring that is currently being undertaken by SVM it is anticipated that, at completion of the acquisition, SVM will have net assets and net cash reserves of approximately GBP 4 m each.

For the three months ended 31 March 2022, SVM generated turnover of GBP 945,451 and an operating profit of GBP 139,726.