Sanne Group, a provider of outsourced corporate and fund administration, reporting and fiduciary services, has agreed to purchase South Africa-based IDS Fund Services for an initial cash consideration of ZAR201.6m (£9.2m).
The deal will include an expected deferred cash consideration of ZAR74.7m (£3.4m) dependent on IDS’s final audited EBITDA for the year ended 29 February 2016.
The acquisition will add over 140 employees based across South Africa and Malta as well as strengthen Sanne’s alternative asset capabilities.
Subject to receipt of regulatory approvals in both South Africa and Malta, the transaction is slated to complete within three months of signing.
Following the completion of the deal, IDS will operate as a new division of Sanne Group, alongside debt, real estate, private equity, corporate and institutional, executive incentives, private client and treasury.
IDS Fund Services provides outsourced investment administration services to hedge funds and employs 140 people in offices in Cape Town in South Africa and also in Malta. It administers structures and funds with assets in excess of ZAR80bn.
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The company provides services such as calculating net asset values, fund accounting, investor services, and transaction and cash management.
Sanne has about 350 employees worldwide and administers structures and funds that have in excess of EUR100bn of assets.
Sanne Group CEO Dean Godwin said: "The acquisition of IDS is consistent with Sanne’s strategy of expanding the Group’s capabilities and product offering, and delivering greater jurisdictional diversification.
IDS founder and CEO Ian Hamilton said: "This approach fits with IDS’s own service ethos and we are confident that we can continue to develop the breadth and quality of our service offering to meet the evolving needs of the funds sector in South Africa."