The DB consolidator Pension SuperFund Capital has acquired pensions services company STM Group for £35.6m.
The acquisition has been made through Bidco — a company set up by PSF Capital this summer to finance the acquisition. As part of the deal STM Group’s CEO Alan Kentish will buy out the firm’s Sipp business for £4.5m though his Pathlines Holdings company.
There has been earlier speculation that PSF Capital would pull out of the DB ‘superfund’ market after a lack of clear guidance from TPR on how profits from this business model should be distributed.
PSF co-founder, Edmund Truell, said he was “delighted” to back Bidco to acquire STM after a period of extensive diligence and strategic planning. “This investment aligns with our wider market aim to provide a complete solution, worldwide, to pension savers and sponsors and improve pensioner outcomes in an aligned way.
“We strongly believe our track record and stewardship will enable us to provide increased security and value-for-money benefits to members, while also helping to deliver the upside that the Mansion House reforms intend.”
STM Group now largely operates in the international pensions area, with operations in the UK, Gibraltar, Spain and Australia. It was originally formed to consolidate corporate and trustee service providers, but has become a leading player in the administration of client assets in relation to retirement, estate and succession planning and wealth structuring to a global market.
STM chair Nigel Birrell adds: “The STM Board is pleased to be recommending Bidco’s offer for the company, which represents a significant premium in cash to the STM share price prior to the commencement of discussion with Bidco and offers certain value for our shareholders, and potential future benefit through the Deferred Consideration Units.
“Whilst we believe that there are significant growth and value realisation opportunities for STM in the short to medium term, we recognise that there are uncertainties and risks which may impact STM’s ability to both optimise growth as a stand-alone quoted entity, and to execute a realisation strategy of certain parts of the business.
“We acknowledge the additional commercial benefits which could be obtained as part of a larger group such as Pension SuperFund Capital, whose management team has a clear vision to deliver a complete solution to pension savers and members.”
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