British investment management firm Brooks Macdonald has agreed to acquire Cornelian Asset Managers Group, an Edinburgh-based wealth manager.
Under the terms of the agreement, Brooks Macdonald will purchase all Cornelian shares from its stakeholders by paying up to £39m as consideration.
The initial consideration will comprise £22m in cash and £9m in Brooks Macdonald shares. Another £8m will be payable, subject to the realisation of cost synergies and Cornelian achieving certain growth targets.
The cash element of the deal will be financed through an equity placing, which seeks to raise around £30m.
Cornelian is an independent wealth and asset manager with nearly £1.4bn in funds under management (FUM).
Brooks Macdonald said that the acquisition will expand its existing discretionary fund management activities. Additionally, the deal is said to bolster the company’s investment management, client and intermediary expertise.
On the other hand, Cornelian’s direct clientele and financial advisers will receive access to Brooks Macdonald’s service portfolio.
Brooks Macdonald CEO Caroline Connellan said: “From the outset of our discussions with Cornelian, we have been struck by the complementary cultures, investment processes and business models of the two firms, with both having a strong focus on clients and intermediaries.
“We are delighted that we have been able to agree a transaction that brings additional multi-asset capability and distribution strength into the Group.
“The transaction creates value for our shareholders and crucially will provide benefits for both firms’ clients and the intermediaries with whom we work.
“The acquisition of Cornelian is a significant step forward in our medium-term strategy of delivering sustainable, value-enhancing growth.”
Subject to regulatory nod, the Cornelian acquisition is set to close in the first quarter of 2020.