THE Newcastle-based corporate broking arm of wealth management firm Brewin Dolphin is to be sold to its senior staff and Spanish financial firm N+1.
The new venture, which is called N+1 Brewin, will be headquartered in Newcastle and staffed by 55 members of Brewin’s corporate advisory and broking division, including 25 in Newcastle.
London-based Brewin Dolphin, which currently employs around 300 people in Newcastle, says the sale will allow it to focus on its core business of wealth management, which accounts for 95% of annual revenues of £250m.
Brewin Dolphin receives £1m in cash from the deal, plus a 14% stake in N+1 Brewin with an estimated value of £4m. The deal is expected to be concluded in September. N+1 is investing £5m of capital and will own 51% of the new venture. Most of the 55 corporate broking staff are also taking a stake worth a total of 35%.
As well as Tyneside the corporate broking division has offices in London, Edinburgh and Leeds. The division mainly advises the small and middle market and has 90 corporate and 100 institutional clients.
It has raised more than £1.7bn for clients and worked on deals valued at £3.4bn over the last four years.
Major clients in the region include Newcastle-based software giant Sage, Newcastle-based retail bakers Greggs and Durham-based industrial services firm Hargreaves.
Graeme Summers, head of the corporate advisory & broking division and managing partner-elect of N+1 Brewin, said: “The new entity will enable us to enhance our service offering for our clients by combining the strength, depth and international reach of N+1’s European financial advisory and asset management expertise, with the existing skills of our team here in the UK. The team is very excited by the significant opportunities that lie ahead.”
Summers, who currently works in Brewin’s Newcastle city centre office, said the new firm would continue to operate from its existing UK offices.
Brewin Dolphin chairman Jamie Matheson said: “Corporate advisory and broking is a different skill set and it makes sense that both businesses concentrate on their core skills.
“This transaction will enable Brewin Dolphin to wholly focus on its core investment management business which accounts for 95% of what we currently do.”
Brewin Dolphin will receive a 6% annual return on its “preferred interest” stake in N+1 Brewin until 2017, after which the stake will be converted into shares.
The corporate advisory & broking division reported an operating profit of £1.3m from turnover of £10.9m in the year ended September 26, 2010.
N+1 is a Spanish-based financial advisory and asset management group with more than 200 staff at offices in Germany, Luxembourg Italy and the UK.