Team PLC - Intention to Float

RNS Number : 4081P
Team PLC
17 February 2021
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO OR FROM, THE UNITED STATES OF AMERICA, AUSTRALIA, CANADA, JAPAN, NEW ZEALAND OR THE REPUBLIC OF SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

 

This announcement is not an admission document or a prospectus and does not constitute or form part of an offer to sell or issue or a solicitation of an offer to subscribe for or buy any securities nor should it be relied upon in connection with any contract or commitment whatsoever. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except in compliance with applicable securities laws on the basis of the information in the admission document (the "Admission Document") to be published by TEAM plc in connection with the placing of ordinary shares of no par value (the "Ordinary Shares") by the Company and the proposed admission of its issued and to be issued Ordinary Shares to trading on AIM, a market operated by London Stock Exchange Plc. Before any purchase of shares, persons viewing this announcement should ensure that they fully understand and accept the risks which will be set out in the Admission Document when published. Copies of the Admission Document will, following publication, be available during normal business hours on any day (except Saturdays, Sundays and public holidays) from the registered office of the Company and on the Company's website.

 

TEAM plc

 

( "TEAM" or the "Company")

 

INTENTION TO SEEK ADMISSION TO TRADING ON AIM

 

TEAM today announces its intention to proceed with an initial public offering ("IPO") and to seek admission of its shares to trading on AIM ("Admission"). TEAM expects that Admission will occur in March 2021. Canaccord Genuity Limited ("Canaccord") is acting as the Company's nominated adviser and broker and Hannam & Partners are acting as Financial Advisor.

 

The Company wholly owns Theta Enhanced Asset Management Limited, trading as TEAM Asset Management, referred to in this Document as TEAM Jersey (together, the "Group"). TEAM Jersey is a Jersey based specialist, investment-led active fund manager currently providing discretionary and advisory portfolio management services to private clients, trusts and charities. The Group intends to target both professional and retail clients through its key discretionary and advisory investment management services.

 

The Directors intend, through both organic growth and a buy-and-build strategy, for the Group to become an internationally recognised wealth and asset management group, driven by an investment process seeking to offer clients positive risk-adjusted returns over the long term.

 

Transaction Highlights

·      The Company is seeking to raise  no less than £5 million, with capacity to accept oversubscriptions (the "Placing")

·      The Placing will be priced on a pre-money valuation for the Company of £7 million

·      The primary use of proceeds of the Placing will be to supplement working capital and provide a launchpad for the acquisition driven strategy

 

Key Strengths of the Group

 

The Directors believe that the Group has a number of key strengths which enable it to take advantage of current and future growth opportunities.

 

·    Established existing business. TEAM Jersey was acquired in January 2020 as the first acquisition for the Company. The business is authorised and regulated by the Jersey Financial Services Commission and since acquisition there has been a significant investment in people (five new investment managers) and infrastructure. TEAM is already demonstrating organic growth - AUM has grown from £140m (December 2019) to £291m in November 2020 - evidencing a capable management team and sound, scalable infrastructure.

 

·    Offshore regulatory jurisdiction. The Group's current business is located in Jersey. The Directors believe Jersey offers a highly-regarded financial centre in a tax-neutral environment with strong connectivity and stable regulatory authorities. The Directors believe the provision of offshore financial services will assist in the organic growth of the Group. Further, the Company intends to use Jersey domiciled listed shares in funding transactions, offering a competitive advantage over private equity backed buyers

 

·      Experienced management team. The Executive Directors are involved in both the strategic and day-to-day running of the business and, together with Senior Management, have extensive experience in the UK (including offshore) and international investment management industry, in both organic growth and M&A. The Executive Chairman has strong relationships with a number of potential funding partners who can assist the Group in identifying and executing potential acquisitions.

 

·      A new consolidator in the UK (including offshore) discretionary and advisory sector, with infrastructure set up for growth. TEAM Jersey is not significant in AUM or financial profile compared to a number of its peers in both the quoted and unquoted financial sector. The Directors however believe this provides TEAM with a significant strength, when coupled with the experience and contacts of the Board, as it means the Group has a simple organisation structure with outsourced ancillary services that can accommodate growth. Since the acquisition of TEAM Jersey, the Company has invested in updating investment capabilities and client service delivery - it is now a scalable hub ready for expansion. The Directors and intend to further invest in technology, personnel, reporting and control systems as the scale of the Group grows. The Directors see the current scale of the business as a benefit, giving the ability to expand and increase AUM at a faster rate than larger peers.

 

·      Identified pipeline of acquisitions. The Group is currently assessing a number of potential acquisition targets that range in enterprise value from £1 million to £60 million which will be targeted post Admission. The Directors believe TEAM has in place a senior management team who have the experience along with both shareholder and institutional support to lead consolidation in the asset management industry. The Non-Executive Directors, following Admission, will provide oversight on future acquisitions.

 

·      Focus on growing markets. As part of its growth strategy, the Company will actively seek international acquisitions in jurisdictions where the asset management industry is considered a growth market, as opposed to more mature, lower growth jurisdictions. The Company intends to make acquisitions in regulated jurisdictions with relatively developed financial services marketplaces. The Directors note that higher growth rates are currently being seen in client fund inflows to many offshore locations.

 

·      High visibility of earnings and recurring revenues. Due to the nature of the Group's business activities, a significant proportion of the Group's revenue, both as at the date of this Document and in the future, is expected to be recurring, providing a high degree of predictability to future earnings.

 

·      Strong balance sheet and access to capital. The Directors are intending to operate the Group with a strong balance sheet. The Directors believe this provides it with capital to execute on the organic growth strategy of the Group. In the event that the Group executes on its buy-and-build strategy and further funding is required, the Directors believe they will be able to access significant equity capital to fund acquisitions. The Company also has the potential to use debt finance, while it will limit prospective gearing to an appropriate level.

 

Group Strategy

 

The Director's aim is to provide long term capital appreciation for Shareholders through dividend payments and shareholder value creation by building a profitable and sustainable business. Growth will be sought through organic growth of AUM and acquisitions, supported by investment in operations.

 

Growth Strategy

 

The Group's overall strategy is to promote the continued growth of the Group into a leading independent wealth and asset management business. It is expected that the Group's growth will be achieved through:

 

·      an acquisition driven strategy to consolidate the  offshore and onshore wealth and asset management market

·      focus on delivering revenue and cost synergies, leveraging increasing scale and breadth of services to gain share of client wallet and economies of scale

·      ancillary complementary services such as specialist funds, cash management, corporate services

·      expansion into complementary locations - onshore UK, Crown Dependencies, other offshore centres

·      organic AUM growth through team lifts, selective hires and targeted business development in Jersey

 

The Directors believe that the successful execution of a buy and build strategy to acquire incremental scale is likely to have the most meaningful impact on the future value of the Group. The Directors believe that there are a number of asset managers who are significantly underperforming due to a variety of factors including poor management, increased regulatory and technology requirements, lack of capital and strategic vision.

 

The Directors acknowledge that the Group has a number of competitors in the form of other networks and other advisory firms seeking to grow by acquisition. However, based on their research of the market, the Directors believe that the proposition on offer from the Group will be well received by owners of businesses and that the size of the asset management industry is sufficient to accommodate a number of consolidators.

 

Mark Clubb, Executive Chairman of TEAM, said:

"I am excited to announce our intention to float TEAM Plc on AIM. The listing and fundraise will provide the Board with the ability to execute TEAM's strategy, both by funding organic growth and enabling the Company to seek to make complementary acquisitions. UK onshore and offshore wealth and asset management is a highly fragmented market that will benefit from consolidation, and TEAM's scalable platform and experienced management team means it is well positioned to capitalise on this market opportunity. TEAM intends to target other regulated financial services companies primarily engaged in wealth management, asset management, cash management or investment management activities located in Jersey and other jurisdictions."

Enquiries:

 

TEAM

 

Mark Clubb - Executive Chairman

Matthew Moore - CFO and COO

Tel:01534 861381

Tel: 01534 877210

 

Canaccord Genuity Limited (Nominated Adviser and Broker)

 

Bobbie Hilliam - NOMAD

Alex Aylen / Jeremy Grime - Sales

Tel: 020 7523 8000

 

Hannam & Partners (Financial Advisor)

Giles Fitzpatrick / Richard Clarke / Ernest Bell

 

Tel: 020 7907 8500

 

 

 

FURTHER INFORMATION ON THE GROUP

 

Directors of the Company

 

Directors

 

Jonathan Mark Gordon Clubb

Executive Chairman

Matthew Moore*

Chief Financial Officer and Chief Operating Officer

Louis Philip Chetwynd Taylor

Senior Independent Non-Executive Director

Michael Mckenzie Gray*

Independent Non-Executive Director

David James Ker Turnbull*

Independent Non-Executive Director

 

*to be appointed ahead of IPO, conditional on completion

 

Directors

 

Jonathan Mark Gordon Clubb, aged 60 - Executive Chairman

 

Mark joined the Board in July 2019. Mark began his 27 year career in investment banking at Hoare Govett and has held various senior management roles at UBS Philips and Drew and BZW (latterly Credit Suisse First Boston). In 1997 Mark, together with six partners, founded London-based investment banking boutique, Altium Capital Partners.

 

Following a management buyout of Altium Capital Partners in 2008, Mark returned to Jersey and has spent the last 12 years in investment management, including at private client stockbroker, Collins Stewart, later acquired by Canaccord Genuity Inc.

 

Mark has a BA (Hons) degree in Economics and Business Studies, CISI level 6 in Private Client Investment Advice and Management and ICA Advanced Certificate in Compliance.

 

Matthew Charles Moore, aged 49, Chief Financial Officer and Chief Operating Officer

 

Matthew will join the Board on Admission having joined the Group on a consultancy basis in November 2020 and as an employee since February. Matthew has a wealth of experience in senior leadership and financial roles, having been CFO at Close Investments, CFO and COO at Origen Financial Services (an Aegon group company) and most recently CFO and COO at Ascot Lloyd, a UK wealth management firm founded by Oaktree, a private equity investor.

 

Matthew brings significant acquisition and integration expertise to TEAM. He was responsible for acquisitions at  Ascot Lloyd, and previously worked in the acquisitions team at Close Wealth Management, prior to which he held various roles in M&A at Commerzbank Securities and ING Barings. Matthew began his career in accounting at Ernst and Young, followed by five years as an equity research analyst at Cazenove & Co.

 

Louis Philip Chetwynd Taylor, aged 70, Independent Non-Executive Director and Senior Independent Director

 

Philip joined the Board in January 2021. Philip has over 40 years' experience in the finance industry, beginning his career at PwC in London. Philip is currently Chairman of the States of Jersey Treasury Advisory Panel and until 31 October 2020 a non-executive director of The Royal Bank of Scotland International Limited.

 

Philip was the Senior Partner of PwC Channel Islands and a Global Leader of the PwC Quality Assurance Programme. Philip has previously served as a Commissioner of the JFSC, as a Member of the Conduct and Case Management Committees of the UK Financial Reporting Council, and as a Member of Jersey Financial Services Advisory Board.

 

 

David James Ker Turnbull, aged 62, Independent Non-Executive Director

 

David will join the Board on Admission. He is currently chairman of Fiduciary Settlements Ltd, a Non- Executive Director of mnAI Data Solutions Ltd. and Managing Partner of Turnbull Ker LLP. David was previously a Managing Director at Salomon Brothers (now Citigroup) where he held various senior positions within the firm including Global Co-Head of Japanese Equities and Global Head of European Equities. David also served on the European Management Committee and Global Business Practices Committee. Prior to Salomon Brothers, David worked for Rowe and Pitman in London and Tokyo. In 1999 David cofounded and was Chief Operating Officer of Antfactory, a global technology investment firm; in addition he founded and acted as Chief Executive of its Japanese subsidiary, Ant Capital. From 2002 to 2010, David was a fund manager focused on Asia, first at Prodigy Capital, where he was a Founding Partner, and then at Morant Wright. David is a former Senior Advisor to the Industrial and Commercial Bank of China, has advised several other companies, particularly in the financial sector, and served on several company boards including Whittard of Chelsea.

 

Michael Mckenzie Gray, aged 54, Independent Non-Executive Director

 

Michael will join the Board on Admission. Michael has over 20 years' management experience in banking. Michael founded MMG Consulting Ltd in 2015, an advisory consultancy firm based in Jersey.

 

Currently, Michael serves as a non-executive director for Triton Investment Management Ltd and the Advisory Board of a Japanese private equity group as well as a non-executive director of FTSE 250 company GCP Infrastructure Investments. Prior to this, Michael served as Regional Managing Director, Corporate Banking for RBS International and Chairman of Funds for RBS Corporate Bank.

 

Michael is a Fellow of the Chartered Institute of Bankers (FCIB), and Associate Member of the Association of Corporate Treasurers (AMCT) and is a Qualified IoD Member (Dip IoD).

 

 

TEAM Jersey financials

 

 

FY2018

£'000

FY2019

£'000

9m to June 2020

£'000

Turnover

937

829

713

Profit/loss

(90)

(70)

(106)

Net assets

473

463

450

 

 

 

IMPORTANT INFORMATION

 

The information contained in this announcement is for background purposes only and does not purport to be full or complete. Any purchase of shares on Admission should be made solely on the basis of the information contained in the Admission Document. No reliance may or should be placed by any person for any purpose on the information contained in this announcement or its accuracy, fairness or completeness. The information in this announcement is subject to change.

 

This announcement is for information purposes only and does not constitute a prospectus or any offer to sell or the solicitation of an offer to buy any security in the United States of America or in any other jurisdiction. Securities may not be offered or sold in the United States of America absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the "Securities Act"). The Ordinary will not be registered under the Securities Act. No public offering of the Ordinary Shares will be made in the United States.

 

This announcement is being distributed only to and is only directed at persons in the United Kingdom, Jersey and/or member states of the European Economic Area who are "qualified investors" within the meaning of article 2(e) of the Prospectus Regulation ("Qualified Investors"). In addition, in the United Kingdom, this Announcement is being distributed only to and is only directed at Qualified Investors: (a) who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order") (investment professionals); or (b) who fall within Article 49(2)(a) to (d) of the Order (high net worth companies, unincorporated associations etc.), (all such persons referred to above being "Relevant Persons"). The term "Prospectus Regulation" means Regulation (EU) 2017/1129, as it applies in the United Kingdom as retained, amended, extended, re-enacted or otherwise given effect to from time to time on or after 11.00 p.m. on 31 December 2020. Any investment or investment activity to which this Announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. By accepting receipt of this Announcement, each recipient is deemed to confirm, represent and warrant to the Company and Canaccord that they are a Relevant Person.

 

Neither the United States Securities and Exchange Commission ("SEC") nor any securities regulatory body of any state or other jurisdiction of the United States of America, nor any securities regulatory body of any other country or subdivision thereof, has passed on the accuracy or adequacy of the contents of this announcement. Any representation to the contrary is unlawful. This Announcement is directed only at, and may only be communicated outside of the United States to persons who are not US persons within the meaning of Regulation S under the Securities Act.

 

This announcement does not constitute an offer to sell or the solicitation of an offer to buy Ordinary Shares in any jurisdiction. Any such offer, if made, will be made pursuant to the Admission Document proposed to be published in due course. In particular, this announcement is not for distribution in or into the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa or Japan or to any national resident or citizen of the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa or Japan. The distribution of this announcement in other jurisdictions including (without limitation) the United States, Canada, Australia, the Republic of Ireland, the Republic of South Africa or Japan (or to any resident thereof) may be restricted by law and therefore persons into whose possession this announcement comes should inform themselves of and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

The date of Admission may be influenced by factors such as market conditions.  There is no guarantee that the Admission Document will be published or that the Placing and Admission will occur, and you should not base your financial decisions on the Company's intentions in relation to the Placing and Admission at this stage.  Acquiring investments to which this announcement relates may expose an investor to a significant risk of losing all of the amount invested.  The value of shares can decrease as well as increase.  This announcement does not constitute a recommendation concerning the Placing, admission or the related shares. The value of shares and the income from them is not guaranteed and can fall as well as rise due to stock market and currency movements. When you sell your investment, you may get back less than you originally invested. Persons considering an investment in such investments should consult an authorised person specialising in advising on such investments.

 

The responsibilities of Canaccord as the Company's nominated adviser under the AIM Rules for Companies and the AIM Rules for Nominated Advisers will be owed solely to the London Stock Exchange and not to the Company, any of its directors, nor any other person in respect of a decision to subscribe for or acquire Ordinary Shares in reliance on the final form admission document relating to the Company. No representation or warranty, express or implied, is made by Canaccord, nor any of its directors, officers, employees, advisers or agents, as to any of the contents of this announcement, including its accuracy or completeness of the information in this announcement (or whether any information has been omitted from the announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

 

This announcement contains certain statements that are, or may be, forward looking statements with respect to the financial condition, results of operations, business achievements and/or investment strategy of the Company. Such forward looking statements are based on the board's expectations of external conditions and events, current business strategy, plans and the other objectives of management for future operations, and estimates and projections of the Company's financial performance. Though the board believes these expectations to be reasonable at the date of this announcement they may prove to be erroneous. Forward looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, achievements or performance of the Company, or the industry in which the Company operates, to be materially different from any future results, achievements or performance expressed or implied by such forward looking statements.

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