News blog

Astaire Group

  • BY: Andrew Hore |
  • POSTED: 15/10/2010 |

Astaire Group is pulling out of Aim broking by selling Astaire Securities to Sandfire Capital Inc, which owns Canadian broker NCP Northland Capital Partners. 

NCP (www.northlandcp.com) has offices in Toronto and Vancouver and it is keen to expand internationally. It should also have a stronger capital base, which will help Astaire.

The sale price is £2.45m, which is similar to book value at the end of June 2010. Even so, Astaire expects to lose £800,000 to £1.4m on the transaction. There will be £450,000 put into an escrow account for 12 months to cover warranty claims.

Astaire Securities has more than 40 clients and its recent focus has been on oil and gas, mining and technology sectors. NCP does not have exposure to oil and gas but it does also specialise in life sciences and infrastructure. Stuart Lane will become executive chairman of the UK business, which NCP intends to rename.

The FSA has agreed to the change of control.

Astaire Securities contributed £2.9m of the group’s income of £6.65m in the first half of 2010. The broking business lost £635,000 of Astaire Group’s £6.86m interim loss.

The deal appears to have reduced Astaire’s pro forma net asset value to £7.8m – but that is a rough estimate based on these figures. The Rowan Dartington private client business is still part of the group but it is also up for sale. There was £5.63m in cash on the balance sheet at the end of June 2010 but it is not clear how much of that goes with the broking business.

The litigation relating to Izodia is against a separate subsidiary and intermediate holding company, Corporate Synergy, and that stays part of Astaire Group. Astaire Securities has paid £37,000 to cover claims against it by Izodia. The cash paid for the business will be retained in Corporate Synergy to cover any litigation claims.

Despite that, the market appears relieved that the disposal has gone ahead and shares in Astaire have risen 0.2p to 0.58p each, which values the company at £1.2m. Evolve Capital, which owns the majority of Astaire Group, is unchanged at 0.75p a share, valuing the investment company at £2.13m.

Download the October edition of AIM Journal at http://www.hubinvest.com/AIMPDFOctober2010_13.pdf

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