19 March 2010
Integrated Asset Management plc
Strategic Agreement with JRJ Group
Conditional investment in Marex
The Board of Integrated Asset Management plc ("IAM" or the "Company") announces that IAM has entered into agreements today with members of the JRJ Group ("JRJ") , which recently acquired an approximate 75 per cent. stake in Marex Group Limited ("Marex"). To that end, IAM has agreed to invest in Marex with JRJ, provide certain consultancy services and permit and require subscription for new IAM shares by the JRJ partners.
Marex is a leading independent specialist broker focused on commodities, financial futures and foreign exchange ("FX"). Marex provides voice and electronic execution and clearing services for commodity markets in metals, energy and agricultural products and the financial futures and foreign exchange markets.
Conditional investment in Marex
IAM has agreed to invest up to $4 million in a JRJ limited partnership forming part of the JRJ Group, which recently acquired approximately 75 per cent. of Marex. This investment may be supplemented by additional investments from a consortium which IAM is to lead, of between a further $11million and $17 million. The consortium's investment will provide it with a minority indirect equity interest in Marex. The exact size of the stake will depend on the final level of the consortium's investment. IAM's interest in Marex following completion of the investment is expected to be less than 2%.
IAM's and its consortium's investment is being made via either one or two specially formed limited partnerships joint venture ("LPs"). Certain of IAM's directors will invest up to US$3.0million in the consortium on a pari passu basis with IAM.
It is intended that unrelated third party investors procured by IAM through private subscription will constitute the remainder of the participants in the LPs. No changes to the service contracts of the directors of IAM will arise as a result of the investment, in the event that it proceeds. IAM directors' investments in the consortium are expected to amount to not more than 30% of the total investments via the LPs.
For the year ended 31 March 2009, Marex revenues increased by 10 per cent. to £79.0 million (2008: £71.7 million) with growth in both the commodity and financial products. Commodity products contributed some 60 per cent. of turnover. Marex reported an operating profit for the year ended 31 March 2009 of £26.3 million (2008: £24.7 million) and a post tax profit for the same period of £19.2 million (2008: £15.0 million). As at 31 March 2009 Marex had net assets of £130.5 million (2008: £124.5 million).
Conditions relating to the investment and other matters
The above arrangements are still subject to a number of conditions including, inter alia, the completion of a fundraising by the consortium of at least US$15 million. If the conditions cannot be satisfied and are not waived, the arrangements may be terminated and in addition, a payment of £250,000 may be payable in certain cases by the party responsible for the failure to satisfy the condition. There can be no guarantee that the conditions will be fulfilled. Further announcements will be made in due course as to the progress of the transaction.
Subscription for new IAM shares
In recognition of the importance of the cross-relationship being established between IAM and JRJ, JRJ partners have agreed to subscribe for 3,636,362 new ordinary shares of 5p each in the capital of IAM for a cash consideration of 33p per share (a premium of approximately 34%to IAM's current share price) by no later than 31 December 2010 representing 10.6% of IAM's expanded share capital. The obligation to subscribe will lapse on the occurrence of certain events including an IAM material adverse change or, in certain circumstances where, $15m is not raised by the IAM consortium for the investment. The subscription price (and number of subscription shares) is subject to customary adjustment in certain circumstances.
Enquiries:
Integrated Asset Management plc
Emanuel Arbib 0207 514 9200
Execution Noble and Co Limited
John Riddell 0203 429 1426