Standard Life completes £390m swoop for Ignis

SCOTTISH FINANCIAL services firm Standard Life Investments has acquired asset manager Ignis in a £390 million deal.

Edinburgh-based SLI said the addition of Ignis, a subsidiary of Phoenix Group Holdings, to its portfolio deepened its investment capabilities and reinforced its strategy of building up its exposure to the insurance market.

The integration of Ignis — a company with assets under management totalling £59 billion at the end of last year — brings four major additional companies into SLI’s insurance client base.

SLI said it expected to achieve growth over the short to medium term as its tie-up with Ignis gives it significant scope to benefit as defined benefit pension schemes matured and insurance companies worldwide looked to outsource their asset management function.

The company said the deal would help accelerate it towards its long-term financial goal of earnings before interest, taxation, depreciation and amortisation (EBITDA) margin of 45%, and said earnings per share would be enhanced in the first full year after the takeover was complete.

“This acquisition is entirely complementary, deepening our investment capabilities, broadening our third-party client base and strengthening our strategic position from which to develop a business in the rapidlydeveloping liability aware market,” SLI chief executive Keith Skeoch said.

“Standard Life Investments continues to perform very strongly.

“Continuity of investment performance and commitment to client service and relationship management remain our key priorities, with migration and integration of Ignis taking place in a controlled manner under unified management from day one.”

SLI yesterday said the £390m purchase price for Ignis — which saw revenues top £150m last year, generating EBITDA of £52m — would be paid in cash from existing funds held by parent company Standard Life Group.

SLI said it expected to make £50m in cost savings from the integration of Ignis by the third year of its ownership of the company, although details of how those savings would be made were not disclosed yesterday.

Standard Life chief executive David Nish said the purchase was a milestone for SLI.

“The acquisition of Ignis continues the delivery of our group strategy to grow assets under management through enhancing our investment capabilities and expanding our offering to meet the changing needs of our customers,” said Mr Nish.

“It will deliver enhanced earnings and cash generation and support future growth in revenues.”

The transaction is anticipated to complete by June 30 but is conditional upon approvals from the Financial Conduct Authority.

Shares in Standard Life Group closed the day up 26.2p at 400p.

Picture: Chris Close. SLI chief executive Keith Skeoch has hailed the acquisition of asset manager Ignis in a £390m deal, which reinforced its strategy of building up exposure to the insurance market.