Private equity firm Epiris has made a recommended cash offer of £206m for IFG Group, owner of Sipp and platform provider James Hay and wealth manager and Financial Planner Saunderson House.

Epiris and IFG Group confirmed today they have agreed to a recommended offer which would will see SaintMichelCo Limited, a wholly owned indirect subsidiary of Epiris Funds, acquire the entire issued share capital of IFG.

The deal, if accepted by shareholders at an EGM, would be worth £1.93 in cash for each IFG ordinary share and values IFG at approximately £206m.

The offer price is a 46% premium to IFG’s closing price on 22 March of £1.32p although IFG’s share price has topped 180p in the past 12 months. Disappointing figures and a weaker stock market have seen the IFG share price suffer downward pressures.

Epiris is a long-established private equity firm and was formerly known as Electra Partners. It is based in Gutter Lane in the City of London and has invested £1.1bn in 20 companies since 2011 ranging from an auction house to an equity release firm.

Epiris managed the FTSE 250-listed investment trust Electra Private Equity plc until 2017 and in 2018 reported that the EpirisFund II, an institutional private equity fund it set up, had attracted capital commitments totalling £821m.

Epiris invests in UK-headquartered businesses with a value of between £75m and £500m.

The company believes it has a strong track record of transforming businesses. To do this it focuses on “strategic clarity, operational excellence, growth acceleration and M&A.”

IFG is a familiar name to UK Financial Planners and advisers and is listed in London and Dublin.  

As at the end of 2018, IFG had £30.2bn of assets under administration or advice across James Hay (£25.3bn of assets under administration) and wealth manager Saunderson House (£4.9bn of assets under advice). 

In the year ended 31 December 2018, IFG reported an operating profit of £12.4m and a post tax loss of £1m. Revenue was up 12% from £78.4m to £87.6m and the firm said it saw improving underlying performance during the year.

Kathryn Purves, chief executive of IFG, said of the takeover: "We are pleased to be announcing this transaction today and believe it is an excellent outcome for shareholders, for the company, and for our clients. 

“The offer by Epiris represents a compelling opportunity for shareholders to realise an immediate and attractive cash value for their shareholding in IFG today. In addition, our employees and clients will benefit under the ownership of Epiris which should help accelerate the delivery of IFG's strategic objectives and the underlying strategies of James Hay and Saunderson House."

Owen Wilson, partner at Epiris, said: "We are delighted that the board of IFG has recommended our offer and we are excited to work with management to realise the growth potential of James Hay and of Saunderson House and to further enhance their position in their respective markets.

“James Hay is a trusted provider in the SIPP market, and Saunderson House, a differentiated independent wealth manager, both have strong reputations across their broad range of clients.”