Prior to publication, the information contained within this announcement was deemed by the Company to constitute inside information, as stipulated under the UK Market Abuse Regulation. With the publication of this announcement, this information is now considered to be in the public domain.

16 November 2022

The Ince Group plc

("Ince", the "Company" or the "Group")

Conditional disposal of Arden Partners plc

The Boards of Ince and Zeus Group Limited ("Zeus") are pleased to announce that they have reached an agreement for Zeus to acquire the entire issued share capital of Ince's wholly owned subsidiary, Arden Partners plc ("Arden") (the "Disposal").  The Disposal is subject, inter alia, to the approval of the Financial Conduct Authority ("FCA") to the change of control of Arden in accordance with section 185 of FSMA and approval from Ince's principal lending bank.

Following the recent changes in management, the Disposal forms part of Ince's strategy to re-focus on its core legal services business and to dispose of businesses that are not closely aligned to that strategy.  In addition, the Board of Ince continues to implement a number of changes in line with its previously announced cost rationalisation programme and growth strategy, particularly in light of prevailing market and economic conditions.

Following its acquisition by Ince in April 2022, Arden saw good retention levels amongst its broking clients.  However, the recent macro-economic headwinds experienced by the capital markets in London have delayed a substantial part of Arden's transaction pipeline into early next year and beyond.  In addition, the continuing pressure on revenues and operating margins within the small cap broking sector has increased the requirement for investment and scale in Arden's business, at a time when Ince is least able to make such a commitment.  The most recent audited annual results of Arden for the year to 31 October 2021 show revenues of £9.28 million and a profit before taxation of £0.85 million, with net assets at 31 October 2021 of £5.76 million.  Since then the Arden revenues for the current financial year to date have declined significantly. This decline is largely attributed to the increasingly challenging fundraising market and wider economic conditions in the UK since early 2022. As a result Arden is currently loss making and the opportunities and benefits that were identified by Ince at the time of the acquisition of Arden are now not expected to be achievable for the Group, given its current resources. The Disposal allows Ince to concentrate its investment and resources on its core legal services business, where the Ince Board believes there are a number of significant growth opportunities. 

Zeus is a financial services group working across public and private capital markets in the UK, with core services of Investment Banking, Equity Sales, Research and Trading, and Investment Management. Arden is a corporate adviser and multi-service stockbroker and the Disposal will enlarge Zeus' client base and sales and trading capabilities, as well as deepening its sectoral expertise.  It will also add a market making capability and a new sector specialism in oil and gas.  It is therefore expected that Arden will be better placed to weather, and take advantage of opportunities arising from, the continuing uncertainties in London's small cap equities markets by joining a larger London broking firm, which will also benefit Arden's employees and clients.

Ince will receive consideration of £1.0 million, payable in cash on completion of the Disposal, on the basis of, inter alia, there being £1.0 million of free cash in Arden and no material outstanding debt.  In addition, there will be earnout consideration payable by Zeus of up to £2.0 million based on certain Arden revenues received by Zeus in the three months following completion of the Disposal. The Disposal proceeds will be applied to the Group's working capital requirements.  Completion of the Disposal is conditional on the receipt of FCA approval of the change of control of Arden, approval of the Group's principal lending bank and no material adverse event occurring prior to completion.  The share purchase agreement for the Disposal contains specific indemnities in respect of certain matters related to Arden and warranties customary for a transaction of this nature, in each case from Ince in favour of Zeus. 

Donnie Brown, CEO of Ince, commented: "In challenging market and economic conditions, the disposal of Arden will allow Ince to focus its resources on its core legal business where there are increasing opportunities.  It also benefits Arden whose clients and employees will become part of a much larger business that is well positioned in the London equity markets. We continue with our re-focused strategy for growth and cost rationalisation which is already achieving positive results".

Update on post-offer intention statements

For the purposes of Rule 19.6(b) of the Takeover Code, further to the completion of Ince's recommended offer for Arden by means of a court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 ("Scheme"), which became effective on 28 April 2022, the Disposal represents a different course of action from the post-offer intention statements made by Ince pursuant to Rule 24.2 of the Takeover Code, as set out in its announcement on 26 October 2021 and the related Scheme document published by Arden on 20 December 2021.  The reasons for this are set out in this announcement.

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About The Ince Group plc

The Ince Group is a dynamic international legal and professional services business with offices in nine countries across Europe, Asia and the Middle East. With over 700 people, The Ince Group delivers legal advice, strategic guidance and business solutions to clients ranging from the world's oldest and biggest businesses operating across numerous industries to ultra-high net worth individuals. Through its entrepreneurial culture and "one firm" approach, the business offers its clients over 150 years of experience, insight and relationships. The Group is driven by a unique team of passionate people whose broad expertise and deep sector specialisms provide their clients with solutions to all their complex legal and strategic needs.