Financial services provider STM Group has sold its Jersey-based company and trust services (CTS) businesses to Guernsey-based Imperium Group, for a minimum net cash consideration of £1.40m.
Following regulatory approval from the Jersey Financial Services Commission, the sale was completed on 8 May, in line with STM's strategy to exit the CTS sector and focus on its core activities of pension administration and life assurance.
The companies sold include STM Fiduciaire, along with a number of non-revenue generating support companies, including nominee companies. Together these companies generated revenue of £1.48m in 2020 and contributed £100,000 towards STM Group's 2020 profits.
The sale has two staged consideration payments totalling £1.86m, with £1.26m payable on completion. The final payment of £600,000 will be paid six months after completion.
Cash of £460,000 will be left within the sale companies, representing the Jersey capital requirement, giving a net minimum cash consideration for those companies of £1.40m.
The transaction allows for a further consideration payment of 50% of any revenue surplus above £1.15m of revenue categorised as recurring revenue. This calculation will be based on the 12 months trading from date of completion.
In addition to the consideration receivable from the buyer, certain net assets relating to debtors and work in progress are ringfenced by the sale companies for the benefit of STM, and these will be paid as these assets are converted to cash at bank.
It is anticipated this will amount to £420,000 and will be principally received in the first six months post completion.
The purchase, along with staff and office resources, highlights Imperium Group's intention to have a solid business platform in Jersey as well as Guernsey.