Specialist asset manager and AIM quoted Gresham House is to acquire Hazel Capital, a leading UK asset manager of new energy infrastructure.
Conditional heads of terms have been agreed and the deal is expected to complete in the third quarter of the year.
Hazel Capital advises on more than £100 million of assets with a product portfolio including Venture Capital Trusts and Enterprise Investment Schemes. The Hazel Renewable Energy VCTs, which were launched in 2010, have achieved market leading performance, with net returns of over 50% before any tax benefit considerations.
The deal forms part of Gresham House’s strategy to grow both organically and through acquisition, and will be funded using shares issued at a premium to the current share price, plus a deferred earn out in cash and shares. Gresham House has been granted a period of exclusivity until 31 December 2017 to finalise its due diligence and the terms of the proposed acquisition.
Also, as part of the deal, Gresham House has agreed to provide growth capital in the form of a secured loan to Hazel Capital during the exclusivity period of up to £4.6m, to develop its immediate pipeline of Energy Storage System (“ESS”) projects. Full repayment is due on, or before, 31 December 2017.
CEO of Gresham House Tony Dalwood said: “We see a substantial growth opportunity in renewables and new energy infrastructure-related assets and today’s announcement is the first step towards bringing a recognised expert investor in this growing sector into our Group.
“Hazel Capital’s success in generating market leading returns through its VCT and EIS platform within the growth areas of infrastructure related asset management, fits well with our strategy to develop our range of alternative and illiquid investment solutions for long term investors.”
Managing Partner of Hazel Capital Ben Guest said: “In Gresham House, the Hazel Capital team has found an exciting new home to realise its future growth potential in the new energy and infrastructure markets. The complementary skills, entrepreneurial drive and overlapping investment philosophy ensures an excellent fit. We are very excited about our future as part of Gresham House.”