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Transactions

September 2019
London, UK
has been acquired by
Pittsburgh, PA
A portfolio company of


Background

StatPro, a UK-based, publicly listed company (LSE: SOG) is a global leader providing a comprehensive range of portfolio management solutions including portfolio valuations, fixed income and equity attribution, risk management, GIPS composites, governance, and analytics reporting, on an integrated, cloud-based platform to the worldwide investment management industry.

The company had been approached multiple times by industry players and by financial sponsors seeking to acquire the company.  In early 2019, StatPro’s founder and CEO Justin  Wheatley reached out to Marlin & Associates for guidance in identifying potential partners who could add value, help the company grow, preserve employment and pay a significant premium to acquire the firm.



Overview

M&A organized a dedicated team to work closely with management to develop materials that would clearly communicate StatPro’s strengths, strategy and growth potential as part of an Investor Presentation that would be on the company’s website and available to all without violating any disclosure rules. M&A then worked with the company to identify and invite a select number of parties to have fireside chats with the CEO to learn more.  Throughout the process we were careful not to communicate non-public information.  With M&A’s guidance, the company’s management vetted these potential partners, met with representatives from several select firms, and after a careful review of their options, management agreed to do a take-private transaction with an affiliate of Confluence Technologies, Inc., a portfolio company of private equity firm TA Associates and a global leader in data-driven solutions for the Asset Management Industry in an all cash transaction valued at about US$230 million (£185 million including approximately £161.1 million in equity value on a fully diluted basis), which represents a premium of approximately:

  •           54.9% to the Closing Price of on the Business Day prior to the date of the Announcement; and
  •           76.4% to the volume weighted average Closing Price for the six months prior to the date of the Announcement.

M&A Role

M&A served as strategic and financial advisor to StatPro and its shareholders. M&A leveraged its deep domain expertise in capital markets technology to conduct a methodical and disciplined competitive process involving multiple potential partners simultaneously.

M&A led the preparation of detailed transaction marketing materials, conducted a thorough review of financial analysis, identified and conducted discussions with potentially interested parties, facilitated information exchange, advised the company on the negotiation and evaluation of alternative offers, managed preliminary and confirmatory due diligence reviews, and eventually helped the company close a transaction with Confluence and TA Associates.

Justin Wheatley, Founder and CEO of StatPro said: “We have been delighted with the service provided to us by Ken Marlin and his team. They have been diligent and thorough, and also a pleasure to work with. The Marlin team’s deep knowledge of our industry makes them the number one go-to firm when you want to sell your business. They have seen and managed more or less every possible situation and know the play book on how to deal with them. The process was meticulously planned and executed.”

We were pleased to advise management, the board and shareholders of StatPro on this very important strategic transaction.

Press

Marlin & Associates Advises StatPro Group plc on a US $230 Take-Private Transaction

September 20, 2019

STATPRO TO GO PRIVATE IN TAKEOVER BY CONFLUENCE TECHNOLOGIES

  

RECOMMENDED CASH OFFER for StatPro Group plc ("StatPro") by Ceres Bidco Limited ("Bidco") a wholly owned subsidiary of Confluence Technologies, Inc. to be effected by means of a scheme of arrangement under Part 26 of the Companies Act 2006.

 Summary

·      The boards of directors of Confluence and StatPro are pleased to announce they have reached agreement on the terms of a recommended all cash offer pursuant to which Bidco will acquire the entire issued and to be issued ordinary share capital of StatPro (the "Acquisition").

·      Bidco is an English incorporated company formed within the group of (and under common control with) Confluence Technologies, Inc. ("Confluence") and ultimately controlled by funds managed and advised by TA Associates.

·      Under the terms of the Acquisition, each StatPro Shareholder will be entitled to receive:

for each StatPro Share held                230 pence in cash

·     The Acquisition values the entire issued and to be issued share capital of StatPro at approximately £161.1 million on a fully diluted basis. The Acquisition Price represents a premium of approximately:

·     54.9% to the Closing Price of 148.5 pence per StatPro Share on 19 September 2019, the Business Day prior to the date of this Announcement;

·    57.3% to the volume weighted average Closing Price of 146.2 pence per StatPro Share for the three months to 19 September 2019, the Business Day prior to the date of this Announcement; and

·    76.4% to the volume weighted average Closing Price of 130.4 pence per StatPro Share for the six months to 19 September 2019, the Business Day prior to the date of this Announcement.

·      The Acquisition is intended to be effected by means of a scheme of arrangement under Part 26 of the Companies Act (the "Scheme") (or if Bidco elects, with the consent of the Panel, by way of a Takeover Offer).

·     The boards of directors of Confluence and StatPro believe that there are strong strategic reasons for combining the two groups with their complementary geographic reach and products, and that this combination has the potential to deliver benefits to customers and other stakeholders.

·    The StatPro Directors, who have been so advised by Panmure Gordon as to the financial terms of the Acquisition, unanimously consider the terms of the Acquisition to be fair and reasonable. In providing its advice to the StatPro Directors, Panmure Gordon has taken into account the commercial assessments of the StatPro Directors. Panmure Gordon is providing independent financial advice to the StatPro Directors for the purposes of Rule 3 of the Code.

·     Accordingly, the StatPro Directors intend to recommend unanimously that StatPro Shareholders vote in favour of the Scheme at the Court Meeting and the Special Resolution at the General Meeting, as the StatPro Directors have irrevocably undertaken to do in respect of their own beneficial holdings (and have undertaken to use reasonable endeavours to procure in respect of the beneficial holdings of their close relatives) being 10,404,138 StatPro Shares, in total representing approximately 15.8 per cent. of the issued share capital of StatPro as at the Last Practicable Date.

·     In addition, Bidco has received support for the Acquisition from StatPro Shareholders holding 32,555,698 StatPro Shares, in total representing approximately 49.4 per cent. of the issued share capital of StatPro (as at the Last Practicable Date). Such StatPro Shareholders have either given irrevocable undertakings or letters of intent to vote in favour of the Scheme at the Court Meeting and the Special Resolution to be proposed at the General Meeting.

·      Bidco has therefore received irrevocable undertakings or letters of intent to vote in favour of the Scheme, in respect of a total of 42,959,836 StatPro Shares representing, in aggregate, approximately 65.2 per cent. of the issued share capital of StatPro as at the Last Practicable Date.

·     Further details of these irrevocable undertakings and letters of intent are set out in Appendix III to this Announcement.

·    The Scheme Document will include further information about the Acquisition, together with notices of the Court Meeting and the General Meeting and the expected timetable of the Scheme, and will specify the actions recommended to be taken by StatPro Shareholders. The Scheme Document will be sent to StatPro Shareholders as soon as reasonably practicable and, in any event (save with the consent of the Panel), within 28 days of this Announcement and will be made available by StatPro at www.statpro.com/investors/announcement and Bidco at https://www.confluence.com/confluence-statpro (subject to certain restrictions in relation to persons in Restricted Jurisdictions).

·    The Acquisition will be subject to the Conditions and certain further terms set out in Appendix I to this Announcement.

·    The Scheme is expected to become Effective in the fourth quarter of 2019, subject to the satisfaction or (where applicable) waiver of the Conditions.

·     The Scheme will be governed by English law and will be subject to the jurisdiction of the courts of England. The Scheme will be subject to the applicable requirements of the Code, the Panel, the rules of the London Stock Exchange and the AIM Rules.

Comments on the Acquisition

Rory Curran, Non-Executive Chairman of StatPro said:

"Confluence is an excellent and complementary partner both in terms of geographical disposition and product capabilities. The combined entity will offer asset managers and fund administrators a more comprehensive range of support services and analytics on one platform. For shareholders, this transaction values StatPro at a very attractive premium of 54.9 per cent. to StatPro's last closing share price. For our colleagues around the world, Confluence, who we have got to know well, have indicated that they plan to invest in StatPro and with their substantial resources will provide a wider range of opportunities."

Mark Evans, Chief Executive Officer of Confluence, said:

"We at Confluence have long respected the spirit of innovation and reputation of excellence that is StatPro.  With a deeply complementary product set, and a diverse geographic footprint, the combined companies have an opportunity to both better serve our clients and continue both organizations' history of creating truly innovative, transformative products that our industry has come to value.  We are committed to working together to create a company that continues to help define the future of asset management."

Jonathan W. Meeks, a Managing Director at TA Associates and a member of the board of directors of Confluence, said:

"TA Associates is delighted to support Confluence's acquisition of StatPro, a combination that we believe offers a significant opportunity to drive creativity and value to the asset servicing market. We expect that Confluence and StatPro's unique blend of subject-matter expertise, global reach and cultural fit will create further value not only for their customers and partners around the globe, but also for the industry as a whole."

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