Gresham House Plc (LON:GHE), the specialist alternative asset manager, today announced that it has completed the acquisition of the asset management business of Hazel Capital LLP (“Hazel Capital”), a leading UK manager of new energy infrastructure. In addition to the asset management business, Hazel Capital owns and manages several Energy Storage System or battery storage projects and has successfully commissioned one of the UK’s largest battery storage facilities near Bristol. Gresham House has also exchanged contracts to acquire stakes in three of these operational and development stage battery storage projects, which will align the Company with the Hazel Capital Management team and its clients.
The total consideration for the acquisition and investment is £2.6 million funded through a combination of cash from the Company’s balance sheet and newly issued shares. This initially includes £600,000 in cash for the acquisition of Hazel Capital’s asset management business plus an investment of £2.0 million, comprised of £750,000 in cash and £1.25 million satisfied through the issue of new ordinary shares at the prevailing share price as at completion of the project investments (the “Consideration Shares”), (which is expected subject to satisfaction of a number of conditions precedent).
For the financial year ended 30 April 2017 Hazel Capital’s asset management business generated an operating profit of £0.9 million (excluding all development profits).
In addition, as per the announcement on 17 October 2017, Gresham House Asset Management, a wholly owned subsidiary of the Company, has been recommended by the Boards and proposed as investment advisor, subject to shareholder approval, for two renewable energy VCTs managed by Hazel Capital. The acquisition of Hazel Capital will add a portfolio of operating assets which, alongside the VCTs, will form a new division: Gresham House New Energy.
The new division will, subject to shareholder approval from the VCTs, have an aggregated AUM in excess of £100 million plus a pipeline of development assets. It will be led by Ben Guest, Hazel Capital’s Managing Partner as well as Bozkurt Aydinoglu and Gareth Owen, and will leverage the specialist technical and investment expertise of the team to drive further organic AUM growth within Gresham House.
Anthony Dalwood, CEO of Gresham House Plc, said: “The Hazel Capital team’s skills and experience will significantly add to the Gresham House group. Gresham House New Energy had been identified as a strategic focus for the Company and we launch with AUM of over £100 million into an area with a significant growth opportunity through renewables and associated new energy infrastructure. Gresham House New Energy will leverage the specialist technical and investment expertise of the Hazel Capital team to drive organic growth, including new product launches, whilst further diversifying the Gresham House product portfolio.”
Ben Guest, Managing Partner of Hazel Capital LLP, said: “This is a natural next step for Hazel Capital. Our expertise in renewables and battery storage will complement Gresham House’s existing strategies of private equity, infrastructure, strategic public equity and real assets. At the same time, we will gain from the experience and skills of the wider Gresham House team and will be able to leverage the resources from being part of the Group’s growing platform for differentiated investment strategies.”
Upon completion, application will be made to the London Stock Exchange for the Consideration Shares to be admitted to trading on AIM. The Consideration Shares will rank pari passu in all respects with the existing ordinary shares of the Company. Admission is subject to the delivery of certain technical and procedural conditions, and is expected to occur later in 2017.