Rathbones Group PLC · LSE:RAT
Rathbones — Rathbone Brothers — Merger or Acquisition (June 2018)
15 slides from Rathbones's merger presentation, Jun 14, 2018
Slide 1: Rathbones acquisition of Speirs & Jeffrey
Rathbone Brothers Plc Rathbones acquisition of Speirs & Jeffrey 14 June 2018
Slide 2: Transaction Overview
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 1 Transaction Overview Delivering on our Speirs & Jeffrey deal growth strategy summary Rathbones strategy ─ Reached agreement to acquire 100% of ─ Ambition to become the UK’s leading independent wealth manager the outstanding share capital
Slide 3: Speirs & Jeffrey – a cultural and strategic fit
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 2 Speirs & Jeffrey – a cultural and strategic fit An increasing shift to discretionary FUM — Founded in 1906, Speirs & Jeffrey has grown to become Scotland’s largest independent wealth manager May-15 May-18 — Independent since its inceptio
Slide 4: Benefits of the transaction
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 3 Benefits of the transaction Rationale Delivers benefits to stakeholders including value creation for shareholders through cost and 1 revenue synergies opportunities Enhances Rathbones’ position as one of UK’s largest wealth managers, wit
Slide 5: Delivering value for Rathbones shareholders
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 4 1 Delivering value for Rathbones shareholders... − Adds a stable client base of c.8,500 clients, three quarters of whom have been with Speirs & Jeffrey for over 10 years2 − Average FUM of c.£750k/client2 (Rathbones: £576k/client) £28m −
Slide 6: …and also benefits to Speirs & Jeffrey stakeholders
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 5 1 …and also benefits to Speirs & Jeffrey stakeholders Clients Employees — Comfort from established Rathbones — Broader community of like-minded brand professionals — Greater support enabling Speirs & Jeffrey — Continuity in management te
Slide 7: Reinforces Rathbones' position as one of the UK's largest wealth managers
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 6 2 3 Re-inforces Rathbones’ position as one of the UK’s largest wealth managers Top 10 UK Wealth Managers by FUM (£bn)1 89.9 Independent Scale benefits Part of a larger financial group Distribution focused competitors • 1 Enhances financi
Slide 8: Establishes a much stronger presence in Scotland
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 7 3 Establishes a much stronger presence in Scotland Glasgow becomes the second largest office Strengthened Scottish base Number of RIM Funds under investment management Client Portfolios Rathbones Aberdeen professionals2 (£bn) FUM: £0.3bn
Slide 9: Consideration structure promotes aligned interests
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 8 4 Consideration structure promotes aligned interests − £79m in cash and £25m1 in shares locked up for 3 years from completion Initial − £79m cash funded by a combination of internal cash resources and a proposed £60m £104m 4.7% issued sh
Slide 10: Attractive financial metrics
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 9 4 Attractive financial metrics − Implied P/E of 12.6x based on Initial Consideration of £104m and Speirs & Jeffrey FY May-18 earnings Attractive − 8.8x including fully phased cost synergies and £15m contingent consideration multiples − 1
Slide 11: Questions
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 10 Q&A Questions ?
Slide 12: Appendix
Page 11 Appendix
Slide 13: Speirs & Jeffrey – Additional Information
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 12 Speirs & Jeffrey – Additional Information FUM (£bn) 3% 2% Geography by FUM 6.4 6.7 6.0 5.4 0.6 0.7 0.5 27% Scotland 0.5 3.5 3.3 3.6 3.2 £5.8bn(1) England Sep-17 2.7 Europe / RoW 1.8 1.8 2.3 68% Other UK FY May 15 May 16 May 17 May 18 Di
Slide 14: Accounting treatment of consideration
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 13 Accounting treatment of consideration Initial cash − Capitalise on completion Initial share1 − Booked to P&L over the 3 years post completion Contingent − Booked to P&L over the 18 months post completion share1 Earn out1 − Booked to P&L
Slide 15: Important Information
Rathbone Brothers Plc | Acquisition of Speirs & Jeffrey Page 14 IMPORTANT INFORMATION This presentation document, any related materials which are distributed alongside this presentation document, each of their respective contents, and any oral presentation made by or on behalf of Rathbone Brothers p
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