Agreement reached with the board of Thinc Destini & AXA UK
AXA UK has reached an agreement with the board of Thinc Destini and its two main institutional shareholders to buy the business.
A recommended offer has been made to ordinary shareholders today. AXA UK will be acquiring Thinc Destini using a newly created company, Advisory Services Limited. Under the terms of the agreement with the two main institutional shareholders and the offer, the shareholders of Thinc Destini will share up to £70m based primarily on the financial performance of the business during 2009. The maximum amount is subject to certain deductions as detailed in the terms of the offer.
AXA UK has also agreed to fund the repayment of Thinc Destini’s existing indebtedness, which arose primarily due to Thinc Destini’s acquisition of a number of IFA businesses, and provide further working capital to the Thinc Destini Group, up to an aggregate amount of £30m. In addition, AXA UK intends to provide long term incentivisation frameworks for existing and new key management, employees and self-employed advisers of Thinc Destini to reward the delivery of the company’s business plan.
The transaction is subject to the satisfaction or waiver of certain conditions. These include the Offer being accepted by Thinc Destini ordinary shareholders holding at least 90% of the issued Thinc Destini ordinary shares. The terms of the Offer have been unanimously recommended by the board of Thinc Destini. AXA UK has received irrevocable undertakings to accept the offer from all the Directors of Thinc Destini in respect of their ordinary shares.
These undertakings, together with other undertakings received from Thinc Destini Directors in respect of further ordinary shares, which they will receive upon the exercise of their outstanding share options and from certain other Thinc Destini ordinary shareholders and option holders, represent, in aggregate, approximately 50% of the issued ordinary share capital of Thinc Destini.
Thinc Destini is a multi-channel advisory business with a national multi-tie, IFA and network model with more than 650 advisers. The business has approximately £3bn of funds under advice and procured around £3bn of mortgages for customers in 2005.
Paul Evans, Chief Executive of AXA Sun Life, says: "AXA UK believes this is a very exciting development for both AXA UK and Thinc Destini which, under our ownership, should benefit from the operational management expertise and global distribution experience of the AXA Group. Through this acquisition, we believe that AXA UK’s core business will gain an additional source of shareholder value. We see the potential for significant growth in this area and we intend to pursue that growth aggressively.
“Our intention is for AXA UK to run Thinc Destini as an independent advisory firm, separate from AXA UK’s product provider businesses.
We believe that this acquisition will help strengthen our overall UK market proposition by extending our offer to the provision of independent financial advice and planning services. This is consistent with our intention to grow our distribution capability and gain greater and closer access to our customers.” .