UK's Miton Group Acquires PSigma

Tom Burroughes

2 July 2013

UK-quoted fund management firm Miton Group has acquired PSigma Asset Management Holdings, creating a firm with combined funds under management of £2.8 billion , while also announcing a placement of shares.

The acquisition of PSigma – with £750 million of assets under management as at 30 June – is expected to be complete on 3 July, according to a statement from Miton Group today. The acquisition is expected to “significantly earnings enhancing” next year.

Miton, quoted on London's Alternative Investment Market, said the investment style of both firms is complementary; the PSigma business is built upon the success achieved in UK income funds by well-known fund managers Bill Mott and Ian Chimes. The role of Mott and his team will be unchanged ensuring continuity for PSigma’s clients, Miton said. As a result of the acquisition, Chimes will head up Miton’s enlarged UK sales and marketing operation, the statement said.

The deal comes amid a flurry of M&A transactions in parts of the UK wealth management and asset management sector, which is facing rising regulatory costs, putting pressure on firms to achieve greater market scale.

The consideration will be a mixture of cash and ordinary shares in Miton and will be between £6.75 million and £13 million dependent upon the scale of PSigma’s assets under management retained in two years’ time, it added.

The initial cash consideration of £5.25 million, payable upon the date of completion of the acquisition, will be funded from Miton’s internal cash balances.

The change of control has been approved by the UK’s Financial Conduct Authority.

The share placing consists of 7.47 million new ordinary shares at 31 pence per share, raising £2.3 million.

Trading update

In the first half of the year, Miton Group's assets under management increased by £217 million to £2.0 billion, up 12 per cent, as at 30 June 2013.

Group cash balances as at 30 June rose to £12.4 million after the payment of the dividend, bonuses and the purchase of Miton shares for the EBT.

Miton’s current trading is in line with expectations, with the planned scale up of resources accelerating the trajectory of the business, the statement said.

Ian Dighé, executive chairman of Miton Group, said: “Bringing Bill Mott and his team together with Miton is a significant step forward to the benefit of our joint client base, particularly in the UK equity income sector. Both businesses have distinctive and forward-looking investment strategies. With combined assets under management of £2.8 billion, we will have an even stronger platform to accelerate the growth of our business.”