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Caledonia buys 7IM in £100m deal

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Caledonia Investments is to acquire a majority stake in Seven Investment Management, in a deal which values the business at £100m.

Caledonia, a UK investment trust company, will invest up to £77m in cash to acquire 94 per cent of 7IM Holdings from its current owners, Aegon and Zurich Insurance.

7IM’s management team will subscribe £5m for the remaining equity, with the balance of the purchase costs to be provided by £25m of bank debt, which Caledonia has agreed to underwrite if it is not in place by completion.

Wealth manager 7IM was established in 2002 and has assets under management and administration of £9.5bn.

In February it was reported that Aegon and Zurich had appointed Evercore to advise on a potential sale, with the business expected to be valued at between £50m and £60m.

But in April Money Marketing reported the business could be valued at over £100m and a number of private equity firms had expressed interest in the sale.

Earlier this month it was reported that 7IM was in advanced talks with Caledonia.

7IM chief executive Tom Sheridan says: “We are delighted to be partnering with Caledonia in the next phase of 7IM’s development. Their investment philosophy and culture, as well as their attitude to longer term investment, are perfectly aligned with our own.

“My colleagues are also pleased to have the opportunity to be providing further investment into the business alongside Caledonia. We have many exciting developments and ideas for our clients, 7IM and our industry, and having Caledonia as a partner will greatly help us in achieving some very exciting goals.”

Caledonia head of unquoted investments Duncan Johnson says: “Caledonia has a long history of investing in successful fund management businesses.

“We look forward to supporting Tom Sheridan and his team in building on 7IM’s impressive growth record and strong investment performance to service an expanding UK wealth management market where there is a growing demand for multi-asset and multi-manager funds.”

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. Well done Tom, Justin and team. A big achievement. I hope you allow yourselves 10 minutes of quiet self-congratulation before ploughing on with whatever the next phase brings.

  2. Congratulations everyone at 7IM.

  3. As a long time holder of Caledonia I have been pleased to see the share price double over the last 3 years. A leading performance in their sector.

    I note that they already have 28% in financials and hope this latest acquisition doesn’t make them too top heavy in this sector, which in truth I’m not that keen on as an investor.

    Perhaps they see synergies with their holding in Close Bros and we may see some sort of further action in future.

    Meanwhile well done Justin and crew. Does this now mean a change to purple braces?

  4. Congratulations to the 7IM Team – Tom, look forward to catching up with you when you are next over OR at a Best Practice Meeting.

    Sincere best wishes

    David

  5. Well done Tom and team, well deserved!

  6. Well done Justin & Tom, it sounds good for the future, well deserved.

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