IFG in takeover talks with Bregal Capital

FINANCIAL SERVICES firm IFG has confirmed it has entered into talks with private equity firm Bregal Capital for a possible takeover that values the firm at more than €231 million.

The potential offer could see shareholders get as much as €1.80 per IFG share, a 35 per cent premium over the stock’s average closing price on the Irish market over a three month period ending April 20th, the day before the initial proposal was received.

In June, IFG confirmed it was in due diligence with two companies with a view to a possible bid. Yesterday, it said it would work exclusively with Bregal until October 10th.

Under the deal, shareholders will also be offered a non-cash alternative for those who wish to reinvest their offer proceeds.

Chief executive Mark Bourke said IFG had worked on building the group in recent years, into a very resilient, attractive business, with a high visibility income stream and predictable profitability.

If a firm offer is made, it is expected any new owners will carry on the company’s current path of organic and acquisition-led growth.

It is a path that has served IFG well. Announcing its half-year results, the group said revenue rose to £56.3 million (€63.6 million) from £49.6 million a year earlier, while operating profit increased to £7.9 million from £400,000.

Adjusted earnings were £10 million, from £8.4 million in the first half of 2010. Group net debt fell to £10.3 million, compared with £17.2 million previously.

The group pointed to the successful integration of its acquisition James Hay, which was on time and within 10 per cent of expected costs.

It had 1,254 new self-invested personal pensions (SIPPs) in the period, with a total of 38,987 SIPPs under administration at the and of the period.

“Our results show that in each of the three main parts of our business, we’re making progress pretty much as we expected and the market expected,” Mr Bourke said.

“Ireland had a very good first half, building the pensions and advisory side of the business.”

IFG said its UK independent financial advisory services also showed strong performance during the period.