The acquisition will mark the first step in the development of Arc’s wealth management division.
TAM has approximately £150m of fund assets under advice having earned some £210,000 on turnover of £1.57m for 2006. The purchase will see Arc’s funds under management grow to £275m, more than double its previous size.
Arc has paid an initial £1.2m for the Leicester-based firm, which has a number of offices across the UK, while a further £450,000 will come through the issue of 3,000,000 new Ordinary Shares valued at 0.5p to be paid subject to TAM reaching its performance targets up to December 2008, amounting to a total of £1.1m.
Arc has also issued a further 6,000,000 Ordinary Shares to be held in a trust subject to the same performance guidelines. Application will be made to the London Stock Exchange for the 9,000,000 Ordinary Shares to be admitted to trading on AIM, and trading is expected to commence on 7 September 2007.
One of TAM’s directors will also be appointed to the Board of Arc as part of the deal.
Arc Fund Management chief executive office Christopher Rowe says: “This acquisition lays the foundations of Arc’s wealth management division. The establishment of this division is a significant step in the development of the Group and we will go on to grow it both organically and by acquisition.
For the Group, the purchase of TAM is earnings enhancing and improves the quality of our earnings and increases funds under management.
In addition, our existing client base will have access to a wider range of services as well as Arc’s range of investment products becoming available to TAM’s clients.”