The James Hay brand will be adopted by the wider business with IFG proposing to raise £45.3 million through a placing and open offer.
James Hay is currently the largest provider of Sipps in the UK with 33,000 and in excess of £8bn of assets under administration. The James Hay brand name will be adopted for the new combined business.
IFG chief executive Mark Bourke says: “This catapults IFG into the position of number one Sipp provider in the UK. IFG will build on James Hay’s brand strength and market position. James Hays’ revenue is stable and recurring. 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.
A spokesperson for Santander says “Santander has announced it has reached an agreement to sell its Sipp and Wrap provider, James Hay, to IFG Group plc.
“The James Hay business is not core to the bank’s long-term strategy. The sale is part of Santander’s ongoing and successful focus on its retail and corporate banking operations.
IFG will hold an Extraordinary General Meeting to approve the deal on 4 January 2010.