Sovereign Group acquires STM business in Gibraltar

Posted: 24/03/2021

The Sovereign Group – the corporate, private client and retirement planning services provider with operations in Guernsey – has acquired STM Fidecs Management Limited (FML).

FML is the Gibraltar-based trust and company management arm of the AIM-listed STM Group. Under the terms of the acquisition, 18 of FML’s staff will relocate to the new Gibraltar offices of Sovereign Trust and the company will be rebranded Sovereign Fiduciary Services.

The rebranded entity will trade alongside Sovereign’s trust and company management division under the management of Sovereign Trust (Gibraltar) MD John Blake. 

The acquisition brings staff numbers on this side of the business to 54. Sovereign currently employs 87 staff in Gibraltar across its retirement planning, wealth management and insurance broking arms.

Sovereign Group CEO Gerry Kelly commented: “This deal follows our acquisition of First Rock Trustees in Gibraltar in October 2020. We expect to see further consolidation in the trust and company sector over the coming few years and Sovereign will be looking for other opportunities in Gibraltar and elsewhere.”

STM FML is regulated by the Gibraltar Financial Services Commission, which has granted regulatory approval for the acquisition.

The sale involves four staged consideration payments totalling £2.45m. The amount payable on completion is £1.25m, with a further £500,000 six months after completion and £375,000 12 months after completion. 

The final payment, which will be based on 2021 audited revenue, will amount to £325,000, subject to an adjustment of 1.5 multiple for any revenue deficit below £1.567m or surplus above £1.6m. 

As part of the deal, Sovereign Group has also acquired the Gibraltar-based tax advisory company STM Fiscalis, which will change its name to Sovereign Fiscalis.

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