LEI: 213800L5751QTTVEA774
THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, AUSTRALIA, CANADA, THE REPUBLIC OF SOUTH AFRICA, JAPAN, ANY MEMBER STATE OF THE EUROPEAN ECONOMIC AREA OR ANY JURISDICTION IN WHICH IT WOULD BE UNLAWFUL TO DO SO
28 June 2024
This announcement contains Inside Information
Marwyn Value Investors Limited ("MVIL" or the "Company")
Marwyn Acquisition Company II - acquisition of InvestAcc Group and follow-on investment
The Company is pleased to announce that funds managed by Marwyn Investment Management LLP have made an investment of £16.7 million into investee company, Marwyn Acquisition Company II Limited ("MAC II") as part of MAC II's £30m fundraise and acquisition of InvestAcc Group Limited, with £11.6m being attributable to the Company's ordinary shares.
MAC II was founded by Marwyn and Mark Hodges with a focus on the UK wealth and pensions market, and starting with this platform acquisition, is seeking to build the UK's leading specialist pensions administration business with an initial focus on the self-invested personal pension ("SIPP") and small self-administered scheme ("SSAS") market.
Following the investment, MAC II is expected to represent c.21% of the ordinary share Net Asset Value ("NAV"), contributing c.39p to the NAV/ordinary share. Whilst the investment is expected to be effective on 4 July 2024, the Company's NAV announcement for 28 June 2024 will include a pro-forma look-through allocation to reflect the expected impact of the investment. The Company continues to expect to pay quarterly dividends in August and November 2024.
MAC II's announcement of the acquisition and fundraise can be viewed here:
Robert Ware, Chairman of MVIL commented: "We are delighted by this enormously exciting investment and the ongoing partnership with the MAC II team. Alongside the excellent performance of both AdvancedAdvt and Zegona this year and continued progression of the wider portfolio, this investment adds another substantial asset to the Funds' investment portfolio with significant potential to deliver material shareholder value."
Background to the investment
InvestAcc is an award-winning provider of SIPP and SASS services in the UK. MAC II believes that InvestAcc provides the optimal strategic platform to create value through a SIPP buy and build strategy. The business benefits from being a leading UK personal pension administrator, having a proven track record of delivering exceptional customer service, scalable operations and infrastructure, a strong financial profile and a sustainable organic growth trajectory. All of the management team, including the founder, are expected to stay with the business post completion.
Strategic Rationale and market opportunity
| 1. | InvestAcc is a highly scalable platform business: an award-winning provider of SIPP and SSAS services in the UK with a strong commitment to high quality customer service and outcomes. This is evidenced by their customer service score of 96%, winning best pension service provider four years running between 2020 and 2023, and winning the best SIPP provider in 2023. The business provides the optimal strategic platform to create value, possessing scalable operations and infrastructure, a strong financial profile - generating £8.8 million of revenue and £3.6 million of adjusted EBITDA for FY23 - and a sustainable organic growth trajectory. The transaction represents a unique opportunity to develop the UK's leading specialist pensions administration business with an initial focus on the SIPP Segment. |
| 2. | Long term structural market growth: favourable macroeconomic trends and the evolution of the pension industry have created a drive towards personal pensions (including SIPPs). The total SIPP market assets under administration are expected to grow at an 8% CAGR over the next 5-years from c.£500 billion to c.£750 billion. |
| 3. | Excellent underlying business fundamentals: full SIPP administrators typically have a customer retention rate of above 90%, creating an ongoing fee-based revenue stream. The average SIPP plan lasts for more than 25 years, benefitting from embedded growth through contractual inflation-linked fees. Industry average EBITDA margins exceed 30% with strong cashflow conversion. |
| 4. | Near term M&A consolidation opportunity with a robust pipeline: there is a highly attractive M&A landscape for acquiring "Full" SIPP and "Simple" SIPP administrators across a range of sellers. Regulatory pressure, underpinned by a push for higher levels of consumer duty care, as well as vendor needs, are driving the sector to actively consolidate. MAC II has a robust pipeline primarily sourced directly by the management team who are in active discussions in relation to five potential acquisitions with vendors which combined could deliver more than £20 billion of AuA and 45,000 customers in 2024 and 2025.
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| 5. | A sector leading team with M&A track record: MAC II's management team have over 65 years of combined operational and strategic experience in the financial services and wealth sector, and have led multiple successful transactions. The MAC II management team are supported by Marwyn's M&A and capital markets expertise, who have a track record of successful public market fund raises, having raised over £3.9 billion to date across 12 comparable vehicles delivering £4.9 billion in gross equity profits for investors. |
The acquisition is subject to the approval of the Financial Conduct Authority.
R Class Investment
Approximately £0.1 million of the Marwyn fund investment is attributable to the 2021 Realisation shares of MVIL. As it is over 3 years since the creation of the 2016 Realisation shares of MVIL, there is no allocation to the 2016 Realisation shares.
This announcement contains inside information for the purposes of Article 7 of the UK version of EU Regulation 596/2014 which forms part of UK law by virtue of the European Union (Withdrawal) Act 2018, as amended ("MAR"), and is disclosed in accordance with the Company's obligations under MAR. The person responsible for making this announcement is Robert Ware, Chairman, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands.
Company enquiries:
Marwyn Value Investors Limited
Scott Danks
07700 720303
Company Secretary - Aztec Financial Services (Jersey) Limited
Chris Copperwaite / Magdala Mullegadoo
01534 833000
Investor Relations
Kam Bansil
020 7039 1901
PR Adviser - FGS Global
Rollo Head: 07768 994987
Chris Sibbald: 07855 955531
Corporate Broker - Liberum Capital Limited
Chris Clarke / Owen Matthews
0203 100 2200
Shares in the Company are not designed or intended for retail investors. Marwyn Investment Management LLP, the Manager, does not promote shares in the Company to retail investors and they should not be offered to retail investors.
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