IFG to buy firm for €38.5m

IRISH financial services group, IFG has reached agreement to buy one of the leading players in the British SIPP (self invested personal pensions) market for €38.5 million.

IFG is set to buy James Hay Holdings from Santander Private Banking (UK) for £35m (€38.5m) in a deal which would place IFG as the number one SIPP provider in Britain, with a 23% market share. James Hay generated after-tax profits of £6m (€6.6m) last year.

Funding for the deal will come through an open offer share placing aimed at raising about €50m.

However, the acquisition is reliant on regulatory approval in Britain and IFG shareholder approval. The group will hold an extraordinary general meeting on January 4.

IFG chief executive Mark Bourke said: “This catapults IFG into the position of number one SIPP provider in the UK. We’ll build on James Hay’s brand strength and market position. The SIPP business margins are attractive and the market is growing.”

“Strategically, the acquisition is a logical and a significant next step for IFG. Financially, the transaction is expected to be earnings enhancing. It strengthens the group’s balance sheet and significantly improves the gearing ratio,” he added.

IFG is looking to strengthen its trustee business – about 40% of total group revenue – and has hinted at making an acquisition in the Far East in the medium term.