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Shares of Gresham House plc (LON: GHE) edged 1.34% higher after acquiring Mobeus Equity Partners’ Venture Capital Trust (VCT) business.
The transaction will cost £36.1 million, with Gresham intending to fund the purchase via a £40 million share placement, which will dilute existing shareholders.
Gresham House currently manages assets worth £4.7 billion as of 30 June 2021, with the figure projected to rise to £5.4 billion once Mobeus’ £396 million investment assets are fully integrated with Gresham’s.
Investors cheered the move, which will see the entire core management, investment, and operational teams involved with the Mobeus VCTs transferred to Gresham House.
Gresham House told investors that it expects the acquisition to be “materially earnings enhancing” by generating £4.5 million in operating profits and a return on capital invested of over 15%.
The acquisition creates one of the largest venture capital trusts (VCT) teams in the UK, allowing the combined entity to profit from economies of scale and a wider talent pool since the two funds will retain most employees.
Mobeus shall also benefit immensely by having access to a more significant investment pool of assets given the multiple billions managed by Gresham House.
Anthony Dalwood, Gresham House’ CEO, said: “As the VCT segment continues to consolidate, this deal enhances our combined reach amid what we believe is a period of rising demand for early-stage growth capital,”
“The role of VCTs in supporting emerging and disruptive businesses is closely aligned with Gresham House's ESG-focused investment strategies, and I look forward to working closely with the Mobeus team to deliver excellent returns for all our stakeholders.”
Gresham House share price.
Gresham House shares edged 1.34% higher to trade at 942.5p, rising from Thursday’s closing price of 930p.
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