TIDMASTO
RNS Number : 0047N
AssetCo PLC
20 September 2023
20 September 2023
LEI: 213800LFMHKVNTZ7GV45
AssetCo plc
("AssetCo" or the "Company")
Sale of Interest in Rize ETF Limited ("Rize") and update on
Parmenion
Sale of Interest in Rize ETF Limited
AssetCo is pleased to announce the disposal today of its 70%
equity interest in Rize, a thematic ETF specialist, to ARK Invest
LLC ("ARK"), a successful and established player in the ETF market
based in the US. The sale agreement delivers consideration to
AssetCo of an up-front payment of GBP2.625m, a deferred payment of
GBP2.625m and an earn out provision, capped at GBP5.25m, which will
operate over five years and is subject to a minimum, itself
dependent upon certain conditions. In addition, the parties have
agreed to work together to support the launch, on the Rize
platform, of a number of ETF products for the River and Mercantile
business, AssetCo's active equity asset management subsidiary.
The sale agreement accelerates the delivery of the potential of
this fundamentally attractive business. Rize will become the hub
for ARK's expansion into Europe and AssetCo is delighted to be
aligned with ARK's and Rize's future success, both through the
mechanism of the earn out agreement and the on-going ETF
partnership. It also simplifies the AssetCo business model which
will in turn reduce costs and improve profits.
As at 31 August 2023, Rize managed $452m in assets in 11 ETFs,
all categorised as SFDR Article 8 or 9 compliant, domiciled in
Dublin and distributed throughout Europe. ARK manages $25bn in ETFs
and other products globally.
For the year ended 30 September 2022, Rize made a loss before
tax of GBP2.5m on revenues of GBP1.9m, and as at 31 March 2023
gross assets were GBP0.75m. Completion of the deal is with
immediate effect (Rize is not, itself, directly regulated), so that
ARK takes immediate economic responsibility for the Rize
business.
The value of goodwill attributed to Rize by AssetCo was GBP12m
as at 31 March 2023 and AssetCo has decided to write that value
down to GBP5m, before accounting for sale proceeds. Against this,
the earn out from the sale agreement (capped at GBP5.25m) will
emerge as a positive cash flow in future years.
Parmenion Capital Partners LLP ("Parmenion")
AssetCo is aware of the speculation around the value of its 30%
equity interest in Parmenion that it acquired for an initial
consideration of GBP20.6m in October 2021. Since acquiring the
interest Parmenion has traded strongly in terms of AUM, revenue and
profitability. Parmenion's shareholders have also received a number
of approaches for the company.
As a result, AssetCo instructed an independent valuation of its
equity interest in Parmenion that concluded that AssetCo's equity
interest had a current value of between GBP75-90m. There are
currently 141,009,943 AssetCo shares in the market which therefore
equates to a value of between 53.2p and 63.8p per share for
Parmenion alone.
Martin Gilbert, Executive Chair of AssetCo said:
"We have consistently said that we see enormous potential for
the development of the ETF market in Europe and we continue to
believe that Rize is well placed to be a key participant in that.
We have come to the view that the best way for Rize to achieve that
ambition is to partner with an established global player to do so.
We are therefore delighted to have reached agreement with ARK
Invest LLP to establish Rize as their hub for expansion into
Europe. ARK are a committed and highly successful ETF player based
in the US and we are extremely pleased to have reached an agreement
that maintains our interest in the growth of their business for a
period and also to partner with them to launch our own ETF products
(managed by River and Mercantile Asset Management).
I am also pleased to share the results of an independent
valuation of our interest in Parmenion which has been the result of
some speculation in the market. The valuation confirms the
considerable value of our stake and the strength of the Parmenion
business."
Cathie D. Wood, Founder, CIO and CEO of ARK Invest added:
"Today's acquisition advances ARK Invest's commitment to offer
high-quality thematic investment solutions to a global investor
audience, particularly European investors who have not been able to
access our products. We believe that the European ETF market
presents a strong growth opportunity as new and younger investors
continue to gain access to ETFs via the growth of digital
platforms, and as active ETFs increase market share by meeting the
demand for innovative investment exposures. We are delighted to
welcome the talented Rize ETF team into the ARK family and to
partner with AssetCo as part of this transaction . By merging the
Rize Team's passion for thematic and sustainable index investing
with ARK's innovative actively managed approach centered on
disruptive innovation, we can offer our clients a more diverse
array of investment options to invest in the future. Together, we
will continue to educate and empower investors, helping them to
achieve their long-term financial goals."
About ARK Invest LLC
ARK Invest LLC controls ARK Investment Management LLC which is a
federally registered investment adviser and privately held
investment firm. Specializing in thematic investing in disruptive
innovation, the firm is rooted in over 40 years of experience in
identifying and investing in innovations that should change the way
the world works. Through its open research process, ARK identifies
companies that it believes are leading and benefiting from
cross-sector innovations such as robotics, energy storage,
multiomic sequencing, artificial intelligence, and blockchain
technology. ARK's investment strategies include Autonomous
Technology and Robotics, Next Generation Internet, Genomic
Revolution, Fintech Innovation, Space Exploration & Innovation,
3D Printing, Israel Innovative Technology, Venture Capital, and the
overall ARK Disruptive Innovation Strategy. For more information
about ARK, its offerings, and original research, please visit
www.ark-invest.com.
For further information, please
contact:
AssetCo plc Numis Securities Limited
Gary Marshall, CFOO Nominated adviser and joint broker
Peter McKellar, Deputy Chairman Giles Rolls / Charles Farquhar
Tel: +44 (0) 7788 338157 Tel: +44 (0) 20 7260 1000
Panmure Gordon (UK) Limited H/Advisors Maitland
Joint broker Neil Bennett
Atholl Tweedie Rachel Cohen
Tel: +44 (0) 20 7886 2906 Tel: +44 (0) 20 7379 55151
For further details, visit the website, www.assetco.com
Ticker: AIM: ASTO.L
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