IFG agrees deal to sell to UK private equity fund

UK-based private equity firm Epiris is to acquire financial services group IFG in a deal valued at £206 million (€240m), as the group announced its 2018 results.

IFG shareholders will be entitled to receive £1.93 for each ordinary share, valuing the entire issued and to be issued ordinary share capital of IFG at about £206 million. This is a 46 per cent premium to its closing share price of £1.325 on March 22nd.

Chief executive Kathryn Purves said it is an "excellent outcome for shareholders, for the company, and for our clients", and the board of IFG is unanimously recommending the deal.

"The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG today. In addition, our employees and clients will benefit under the ownership of Epiris which should help broaden and accelerate the delivery of IFG's strategic objectives and the underlying strategies of [the firm's investment divisions] James Hay and Saunderson House," said Ms Purves.

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The Dublin- and London-listed financial services group said on Monday that in the year to December 31st 2018, revenues rose by 12 per cent to £87.6 million, driven by repricing and increases in the Bank of England interest rate at James Hay and strong performance at Saunderson House.

Pre-tax profits rose from a loss of £381,000 in 2017 to profit of £450,000 for 2018 while operating profit (after exceptional costs and amortisation), was £0.3 million, up from a loss of £0.4 million in 2017.

IFG said that no final dividend would be paid in 2018, in line with its “prudent approach of retaining cash to cover worst-case outcomes”, Mr Dearsley said.

On Brexit, IFG said that in the event of a hard Brexit or a no-deal Brexit there could be significant knock-on impacts.

“Brexit remains a source of considerable uncertainty and a prolonged period of market turmoil or a significant economic downturn could potentially have material adverse consequences for either business,” Mr Dearsley said.

Looking ahead, despite a “challenging” start to 2018, the group is entering 2019 with “confidence and clear and ambitious medium-term plans”, Mr Dearsley said. “We are making good progress on the three near-term priorities identified as part of our strategic review and we are moving towards having two self-reliant businesses able to deliver on their growth plans. Resolution of legacy issues will allow our businesses to focus on delivering on their potential and will allow us to consider strategic options for the group.”