The Nordic asset managers Evli Plc and EAB Group Plc signed a “Letter of Intent”, whereby both parties are considering a potential combination of their operations. This combination could create one of the leading Nordic asset management companies, listed on Nasdaq Helsinki, with a strong market position in the Wealth Management, Advisory, Alternative Investment, Employee Fund Management, and Administration Services businesses.
Both companies share a strong commitment and dedication to responsible investing and offering sustainable investment solutions.
The name of the new company would be Evli Plc and its business strategy would be based on Evli’s existing strategy. The implementation of this possible combination of operations would take place during the second half of 2022.
Evli Group, the fourth largest asset manager in Finland, offers Wealth Management and Advisory Services to institutions, companies and individuals. At the end of 2021, it managed client assets of €17.5 Bn, and has 250 professionals in Sweden and Finland. Evli Plc has two series of shares, A and B shares. The B shares are listed on the Nasdaq Helsinki Stock Exchange.
Its strategy is focused on becoming one of the Nordic area’s leading providers of WM and Advisory services to private and institutional clients, through both international sales growth and strengthened distribution in alternative assets. The merger with EAB would accelerate the objectives of its strategy.
EAB (Elite Alfred Berg) has a client base of around 10,000 clients and assets under management of around €2.5 billion, as well as 90 professionals working in 13 Finnish cities. Like Evli Plc, the parent company EAB Group Plc is listed on the Nasdaq Helsinki Stock Exchange. Its service offering is based on comprehensive asset management for private individuals, professional investors and companies. It is the leading provider in Finland of Personell Funds (employee compensation management in companies), a segment in which it has 95,000 clients.
The combined operations of the two companies would result in a company with the following business figures
- Estimated net revenues of €138 million
- Operating profit of € 59 million
- Assets under management of € 20 Bn.
- Team of approximately 330 people
The new company would become, “one of the leading providers in the asset management and advisory sector in the Nordic area, with a strong market position. Because it would have a wider range of high quality products and services, as well as a deep market knowledge that would facilitate the growth of its business and the improvement of the client experience,” according to Evli Plc.
Synergies and benefits
Evli Plc estimates that the combined operations would create synergies from the unification of the structure and cross-selling, valued at €8 million per year from 2023 onwards, once the potential merger is completed. Moreover, the transaction would drive a number of benefits for the shareholders of both companies:
- Economies of scale that accelerates the growth of the customer base and AUM.
- Strengthened product offering, market knowledge and expertise in alternative assets.
- Increased administrative efficiency.
- Clients base with similar profile (institutions, companies and individuals).
- Similar values and corporate culture.
- Long-term commitment of the company’s owners.
New shareholder structure
Following the business combination, Evli’s shareholders would hold in total approximately 91% of the shares and 99% of the votes of the Combined Company, and EAB’s shareholders would hold approximately 9% of the shares and 1% of the votes of the Combined Company. Evli’s current CEO, Maunu Lehtimäki, would continue to be CEO of the Combined Company, and the members of Evli’s Board of Directors would continue to be members of the Board of Directors.
“The signing of this pre-agreement is a step towards Evli’s long-term goal of becoming one of the leading Nordic asset managers. The similar cultures and values of the companies strengthen the basis for a successful merger.”Maunu Lehtimäki, CEO of Evli
“Together with Evli, we are both committed to responsible investing and, by joining forces, we can aim for rapid growth both at home and abroad, being an even stronger player in responsible investing. In addition, the combination will give us a strong position in institutional asset management and in the employee incentive and remuneration management business.”Daniel Pasternack, CEO of EAB