The acquisition comprises an initial consideration of €20.81 million (around $29.9 million) to be paid on completion, with up to an additional €15 million payable in December 2014 based on the performance of Tilman to September 2014. The entire consideration is payable in Brewin Dolphin shares, subject to certain lock-in arrangements, Brewin Dolphin said in a statement.
Tilman's funds under management are €917million, of which approximately 70 per cent are managed on a discretionary basis. The initial consideration, excluding surplus cash, represents a cost of 1.7 per cent of funds acquired, the statement said.
The entire consideration is payable in Brewin Dolphin Holdings ordinary 1 pence shares. The shares for both tranches will be issued at the average mid-market value of the shares for the three days prior to the issue and the new shares will rank pari passu with existing shares.
Tilman is based in Dublin and was founded in 1995 by its main shareholder Ray Tilson. Around 70 per cent of its funds are managed on a discretionary basis and less than 10 per cent of these are dependent on the Irish market, being largely invested internationally.
Tilman has six investment managers and ten support staff all of whom will continue to be employed by Tilman, which from completion will be renamed Tilman Brewin Dolphin. Ray Tilson will remain managing director of Tilman Brewin Dolphin. Tilson owns 61 per cent of Tilman and total management holdings amount to 75.5 per cent.
Certain Tilman shareholders including management have agreed to lock-in arrangements whereby 50 per cent of the Brewin Dolphin shares received by them as initial consideration will be held in a group nominee for two years from completion, subject to "good leaver/bad leaver" conditions. Similarly, 50 per cent of any shares awarded to management under the final consideration have to be held until 31 December 2016 with "good leaver/bad leaver" conditions.