MJ Hudson acquires Ireland-based Bridge Group

Asset management consultancy MJ Hudson has acquired Ireland-based funds service Bridge Group, it announced on Wednesday, conditional on regulatory approval.

The AIM-traded firm said the vendors were David Dillon and Paul McNaughton, both described as “experienced practitioners” in the funds sector, and directors and the principal co-founders of the business.

It said the acquisition would build on its specialist funds operations in London, Luxembourg and Guernsey, and add a “strategically important” geography to its network.

The transaction was expected to be accretive to earnings per share from completion.

MJ Hudson described Bridge Group as a Dublin-based provider of specialist support services to the funds sector.

Founded in 2005, it offers regulatory compliance, domiciliation and risk services, and is authorised to provide third-party management services to both UCITS and alternative investment fund platforms.

It has 27 permanent staff servicing 100 asset managers, with more than €120bn in assets.

Initial fixed consideration of €2m would be payable in cash, with deferred and additional earn-out consideration of up to €10m payable over a two-year period.

The consideration would comprise cash and new ordinary shares in MJ Hudson, with the latter representing about 20% of the total.

Those shares would be allocated to directors, staff and employees of Bridge Group, and would be subject to lock-in arrangements for a period of at least 12 months from the date of issue.

The cash consideration would be funded from MJ Hudson´s existing cash resources.

Completion of the acquisition remained conditional on regulatory approval from the Central Bank of Ireland.

For the 12-month period to September, Bridge Group was expected to have generated EBITDA of €0.5m on revenues of €4.0m, on the basis of unaudited management accounts.

Revenues were expected to grow by over 30% in the current year.

The business was being acquired on a debt-free basis, and had net assets of approximately €2.2m.

The vendors of Bridge Group would remain “fully active” in their existing roles, MJ Hudson confirmed.

All staff would transition to MJ Hudson, and the business would trade under the MJ Hudson brand.

The deal would “substantially increase” both MJ Hudson’s outsourcing division’s revenues, as well as staff numbers and capabilities.

“The acquisition of Bridge Group is a key milestone for MJ Hudson´s Manco and regulatory platform offering,” said chief executive officer Matthew Hudson.

“It means we can now offer clients representation in each of the principal UK and European fund centres as Brexit approaches.”

Hudson said that, together with the company’s equivalent London, Luxembourg and Channel Islands offerings, the firm was now “one of the largest independent regulatory platforms” for asset management clients, and especially alternatives.

“The acquisition also gives us an extended Manco capability and a timely UCITs platform that complements our AIFM platforms in the UK, Luxembourg and Guernsey.”

At 0948 BST, shares in MJ Hudson Group were down 0.48% at 41.5p.