JTC has agreed to purchase Minerva, a Jersey-based provider of private client, corporate, fund and treasury services, for a maximum consideration of £30m.
Minerva reported earnings before interest, taxes, depreciation and amortisation (EBITDA) of £2.5m in the year ended 31 December 2017. The firm’s gross assets totalled £12.5m at the end of December last year.
The acquisition is part of JTC’s growth plans, which were unveiled at its IPO in March this year.
JTC will initially make a payment of £28m for the deal, of which 60% will be paid in cash and the remainder through the issuance of new JTC shares. The cash payment will be financed using operating cash flows and debt facilities of JTC.
The earn-out payment of up to £2m would be made in cash next year. This payment would be subject to the acquired entity recording a minimum EBITDA margin of 30% in the six months after deal completion.
Through the deal, JTC will get a new office in Dubai. The acquisition is also said to boost the firm’s treasury services offering as well as extend its reach in sub-Saharan Africa, India and Asia.
As part of the deal, Minerva’s principal managers Vipin Shah, Umesh Sahai, Neel Sahai and Steven Bowen will move to JTC. These managers have ownership stakes in Minerva.
“I am delighted with this deal, which is an important step in the development of Minerva, and we look forward to working closely with the highly experienced teams at JTC to further enhance our offering. The founders and the senior management team remain shareholders, having taken much of our consideration in shares, and are committed to continuing the work we have been doing for the last 40 years,” Shah noted.
The deal is expected to be wrapped up in November 2018, subject to regulatory nod. JTC expects the deal to be “immediately earnings enhancing”.
JTC, which offers fund, corporate and private wealth services, snapped up Dutch corporate services firm Van Doorn last month.
JTC CEO Nigel Le Quesne said: “Minerva has a long track record with particular strength in the private client sector and the markets of Africa, Asia and the Middle East.
“There is a clear fit with our existing operational footprint and client base and this will allow us to leverage our scalable global platform to enhance operating margins as well as to drive future growth.”