I&M Holdings has bought a 65 per cent stake in corporate advisory firm Burbidge Capital even as a section of its subsidiaries recorded a 21.6 per cent jump in half-year net profit to Sh3.48 billion.
The Nairobi Securities Exchange-listed firm is estimated to have spent Sh63.7 million, in cash and shares, to acquire the interest from Burbidge founders.
“Following receipt of all regulatory approvals… I&M has successfully concluded the acquisition of 34,477 ordinary shares in the capital of Burbidge Capital representing 65 per cent of the issued share capital,” the banking group said in a statement. Mr David Burbidge (chairman) has sold all his 23,921 shares in the company to I&M, earning a total of Sh44.1 million.
Mr Edward Burbidge (CEO) earned Sh19.3 million from selling 10,556 shares, a move that will leave him with 16,444 shares equivalent to a 31 per cent stake.
Mr Edward has also undertaken to transfer 2,121 shares, out of his original 29,051 shares, to create an employee share ownership plan (ESOP) for staff of the firm.
The buyout announcement came on the same day that I&M published results for the half year ended June covering the performance of I&M Insurance Agency, I&M Realty and its banking subsidiaries in Kenya and Tanzania.
Rwanda and Mauritius
Results for the other units, including banking operations in Rwanda and Mauritius, are expected to be published later under the holding company which will capture the group’s comprehensive performance.
Performance for the reporting entities was boosted by interest income which grew 15.7 per cent to Sh10.5 billion in the review period.
Interest income from loans and advances alone grew by Sh1 billion to Sh8.3 billion as the lender’s loan book expanded to Sh117.7 billion from Sh110.8 billion.
Gross non-performing loans grew over two fold to Sh5.9 billion, with loan loss provisions rising 43 per cent to Sh652 million. I&M is betting on the acquisition of Burbidge to broaden its range of financial services and acquire more clients through the company licensed as an investment advisor by the Capital Markets Authority (CMA).
Burbidge is also a nominated advisor to firms listed on the Growth Enterprise Market Segment of the NSE. “It provides the group an opportunity to increase its reach and services to meet the requirements of its customers who require specialist advisory services,” I&M said in a statement.
“We expect a significant surge in activity due to an increase in marketing and advisory mandates from I&M Group’s existing client base, as well as the extension of debt-related services to Burbidge’s existing client base.”
Burbidge offers a wide array of corporate advisory services including initial public offerings, private equity, debt, mergers and acquisition. Some of the firms it has consulted for include Atlas, Flame Tree, Prime Bank and Fusion Capital.
I&M plans to have Burbidge take over some of the financial services it has been offering, with the firm also set to upgrade its licence to that of a fund manager.