UK - Midas Capital Partners and Iimia MitonOptimal have agreed terms for a merger to create a multi-asset fund management company with more than £2.9bn (€3.9bn) assets under management.
The deal, which is classed as a reverse takeover under AIM listing rules, will see Iimia MitonOptimal acquire the entire share capital of Midas for £100.3m consisting of £59m in cash and 27,500,129 new ordinary shares.
Iimia MitonOptimal said the merger would create a leading multi-asset fund management business, as Midas' investment record and distribution channels among IFAs would help strengthen its investment proposition, while reducing central costs.
Midas Capital currently manages more than £1.6bn funds under management, including a small number of segregated mandates for pension funds such as a £53m balanced mandate for the London Borough of Barnet, while it reported total net inflows into its two open-ended funds of £824m in 2007.
Iimia MitonOptimal claimed the merger would help in the current "turbulent stockmarket conditions" as it believes the "multi-asset approach to seeking investment returns should continue to attract a high proportion of inflows into the group's funds".
The resulting company will be renamed Midas Capital, although Iimia MitonOptimal will be the parent company, while Simon Edwards, joint founder of Midas Capital partners and former CIO at the £3bn Merseyside pension fund, will become managing director.
It is expected the acquisition will be completed by March 7, subject to shareholder and regulatory approval, and the terms of the deal will see at least £20m of the £59m cash payment re-invested into the company for at least the first year of operation.
The company will also continue to operate through three separate divisions: the fund management arm will be run under the Midas and Miton brands; the wealth management division will operate under the iimia name, while the corporate services sector will use the Intelli brand.
The firms noted the credit crisis and higher volatility in equity markets have "reduced the risk appetite" of investors and argued that the enlarged group will be "well positioned to take advantage of the growing demand for reduced risk and multi-asset investment products".
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