# STM Group to acquire portfolio, net assets and trustee companies of Mercer Ltd

- Link: https://www.directorstalkinterviews.com/stm-group-to-acquire-portfolio-net-assets-and-trustee-companies-of-mercer-ltd/4121074535
- Published: 2022-07-26T07:16:32+01:00
- Author: Giles

**STM Group Plc** ([LON:STM](https://www.directorstalkinterviews.com/company/stm-group-plc/stm.l)),
the cross border financial services provider, has announced that it has entered 
into an agreement to acquire the portfolio, net assets and trustee companies of 
the SIPP and SSAS businesses, from Mercer Ltd, for a fixed consideration of £3.34
million. Completion is planned for the 31st August 2022.

The Acquisition will be funded from existing financial resources and the remaining
available debt facility previously arranged with the Group’s bank. 

The Acquisition is not subject to regulatory approval as STM is not acquiring the
regulated entities themselves, however both parties have kept the FCA informed of
progress throughout the transaction process.

**Highlights of the Acquisition: **

·    The Acquisition of the portfolio is complementary to STM’s existing product
offerings in the UK SIPP and SSAS market and will add some 2,100 SIPPs and 700 SSASs
to the UK portfolio, which will double the revenue generated from that UK personal
pensions business and provide a solid platform for scalability, particularly for
our SSAS operations, and efficiencies going forward.  

·    STM will retain the office premises in Cardiff, as well as the existing staff
members, who are well regarded and experienced, giving a further depth of resources
and knowledge to STM’s UK business.

·    The portfolio generated some £0.87 million EBIT for the last financial year
ended December 2021 and is expected to continue contributing £0.87 million EBIT 
to STM’s current UK business, Options, on an annualised basis, after a twelve month
phased integration process.  As a result of transaction costs of £0.3 million, and
specific integration costs of £0.3 million, it is anticipated for the four months
to 31 December 2022 that the Acquisition will be a negative contribution of £0.3
million to the Group’s result.

·    STM will work with Mercer’s team to ensure a seamless transition for clients,
staff colleagues, and other stakeholders, and have entered a transition agreement
with Mercer for a period of up to six months as commitment to such a process.

·    The Acquisition of the portfolio will also give Options access to an expanded
network of intermediaries who have introduced clients to Mercer. Working with the
established team in Cardiff, Options will build further on the existing strong relationships.

·    The Acquisition consideration includes the purchase of the net assets of the
business which amount to circa £1.0 million, which primarily relates to fees yet
to be collected from clients. In addition, Options, will make a one-off adjustment
to account for deferred revenue under its accounting policy.

> ** Commenting on the Acquisition, Alan Kentish, Chief Executive Officer of STM
> Group, said:**
>  “We are delighted that Mercer has chosen STM as the new home for its SIPP and
> SSAS business, previously acquired as part of its own acquisition of JLT. Both
> ourselves and Mercer are committed to ensuring a seamless transition for clients,
> intermediaries, staff and other stakeholders.
> “The revenue generated by this portfolio will mean that our Options personal pension
> solution business in the UK will effectively double in size and will give us a
> new centre of excellence for our SSAS business.
> “The business is well run by the team in Cardiff.  This allows us to implement
> an integration plan that can dovetail with our overall plans in relation to changing
> our operating model to improve our margins, post significant investment in our
> IT infrastructure.  I am delighted to welcome the team to the STM family.
> “The SIPP marketplace continues to see change and out of this comes opportunity
> to differentiate our proposition. Unlike most SIPP providers, STM also has a UK
> workplace pension solution and this in itself allows us to offer a full suite 
> of retirement savings options to anyone, no matter where they are within their
> career path.
> “I look forward to updating the market as to our progress on this exciting next
> stage of the STM journey.”

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