Listed law firm The Ince Group has decided to press ahead with its £10m acquisition of corporate adviser and stockbroker Arden Partners even though it can no longer be a nominated adviser (nomad).
The decision of the London Stock Exchange last week that Arden could not continue as a nomad – a financial services business that advises would-be entrants to AIM – threw the deal into doubt.
But Ince announced yesterday that it has decided to waive the nomad condition that forms part of the scheme of arrangement it will apply to the court to approve.
In a statement, Ince told investors: “Although this is a significant change, the board of Ince believes that Arden’s reputation is primarily built around its ability to raise money for its clients and provide other broking and advisory services, and therefore the loss of its nominated adviser licence should not materially impact Arden’s brand and ability to engage new clients nor its ability to provide fund raising and corporate broking services.
“The strategic rationale for the acquisition… which focuses on expanding the enlarged group’s client base and deal flow, fundamentally remains the same.”
Announcing the deal last October, the pair said there was “a compelling strategic and financial rationale” for the deal.
“The enlarged group will benefit from a significantly expanded client list and will be able to offer a broader range of services across all client relationships.
“Arden currently holds a list of over 40 retained public corporate clients, where there is little existing overlap with Ince, representing a clear opportunity for cross-selling of legal, consulting and corporate advisory services.
“Ince acts for over 1,000 corporates across public and private markets both in the UK and internationally. Many of these will consider fundraising and require corporate finance advice…
“The acquisition has the potential to increase the deal flow to the Ince legal services business significantly, especially in capital markets work.”
Ince said the deal would accelerate the growth of its corporate finance division and enhance its private client offering with Arden’s work for high net-worth clients.
Further, the acquisition “will provide a strong precedent for future add-on acquisitions in the wider legal and professional services sectors”, with the announcement describing both the legal and small cap investment banking markets as “highly fragmented”.
Under the terms of the acquisition, Arden shareholders were to receive seven Ince shares for every 12 Arden shares, although Ince’s share price has since halved from the 53p it was at the time.
Upon completion, Arden shareholders will own approximately 22% of Ince’s enlarged issued share capital.