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London & Colonial finds parent to satisfy its ambitions

by LLB Reporter
13th Sep 16 9:18 am

Deal of the day

The innovative personal pension provider London & Colonial has been sold to AIM-quoted STM Group for £5.385m in a deal which seems a departure from its most recent plans.

L&C had revenues of £3.83m last year and has net assets of £4.8M. It has developed a lucrative niche in flexible annuities and was a pioneer in Qualifying Recognised Overseas Pension Schemes (QROPS). It has been pondering strategic options for some time in the face of unsolicited offers and the wish of some of the founding shareholders to sell their stakes.

In June its product director Adam Wrench spoke of the intention to raise new capital and make an acquisitions and suggested that the company was close to a management buyout. However it now seems that STM has pre-empted those plans and will give the group the support of a larger balance sheet to deliver on its aspirations. It seems likely that the enlarged group will still look for acquisition opportunities.

STM’s chief executive Alan Kentish explains: “London & Colonial is a very well respected name within the industry where there are a number of current opportunities that can be accelerated with STM’s resources and critical mass in the QROPs market. Not only does the acquisition get STM a foothold into the UK SIPP market, it also brings with it a number of bolt-on consolidations in the QROPs and Life Assurance business.”

While for London & Colonial, its chairman Robin Ellison adds: “We recognise that STM’s enviable distribution network will allow LCH’s businesses to flourish more quickly than could be achieved by LCH’s existing management and network.”

This story first appeared on Acquisitions Daily, a leading publication that provides critical comment, analysis and statistics on every important issue in acquisitions, mergers and buyouts. Sign up here for a free trial.

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