The sale of Quilter International to Utmost Group completed on 30 November 2021, both companies said in separate statements this morning.
Mike Foy has been appointed chief executive of the expanded Utmost International Isle of Man operations, subject to regulatory approval.
Peter Kenny, chief executive at Quilter International, "has decided that he would like to pursue different opportunities at this time", Utmost Group said.
The operational integration of the two businesses will take 12 to 18 months, it added.
A single suite of products, combining the strengths of each range will be available under the Utmost brand.
Paul Thompson, CEO of Utmost Group plc said: "I am delighted to confirm completion of the acquisition of Quilter International and would like to extend a warm welcome to our new colleagues, distribution partners and clients joining Utmost Group.
"The Acquisition marks a significant milestone in the Group's strategic development and brings additional scale, skillsets and cashflows to the Group. The Acquisition cements Utmost Group's position as a leading consolidator in the insurance and savings market and gives the Group an enhanced platform to pursue further acquisitions."
Ian Maidens, CFO of Utmost Group plc added: "The Acquisition demonstrates the Group's ability to complete value-add acquisitions which enhance customer outcomes and provide attractive returns to shareholders.
"The Group has been able to execute a sizeable, strategic transaction whilst retaining its strong balance sheet, robust capital position and conservative leverage ratios, giving us headroom for further acquisitions. The completion of the Acquisition, following the inaugural Tier 2 issuance in September, completes a seminal year for the Group."
Total cash consideration was around £480m, representing the agreed cash consideration of £460m together with accrued interest payable under the sale agreement up to the completion date of around £20m.
After allowing for costs and the capital impact of the transaction together with other expenses associated with the sale, Quilter said it considered the net surplus proceeds from the sale to be around £440m.
As outlined at its Capital Markets Day on 3 November 2021, Quilter further said it intends to retain £90m of these proceeds to fund its simplification plans and to undertake selected investment to support longer-term revenue generating initiatives. Quilter is currently minded to return the remaining £350 million to shareholders.
The sale was structured under a locked-box mechanism with effective economic interest passing to Utmost from 1 January 2021.
Therefore, in line with precedent set out on the previous disposal of Quilter Life Assurance, a pro rata to Full Year 2021 earnings contribution from Quilter International to the Group's 2021 dividend will be regarded as a component of the distribution of sale proceeds. This is expected to account for around £25m of the proposed return to shareholders.
The balance of around £325m is expected to be returned as a special return to shareholders through either a special dividend or through issuance and redemption of B-shares. This special return will be accompanied by an ordinary share consolidation to neutralise the impact of the distribution on the Quilter share price.
The proposed return to shareholders and share consolidation is subject to the normal year-end process, regulatory approvals and any required shareholder approvals at a General Meeting. Quilter currently expects the special return to be formally proposed to shareholders alongside its full year results which will be announced on 9 March 2022.
Required shareholder approval(s) will be sought at a General Meeting which is currently expected to be held alongside the Quilter 2022 Annual General Meeting on 12 May 2022. The special return to shareholders is currently expected to be completed prior to 30 June 2022.
Paul Feeney, CEO of Quilter said: "Three years on from our Listing, the sale of Quilter International completes the reshaping of our corporate perimeter. We have simplified our operating model and removed businesses that weighed on our growth trajectory. The proposed £350 million return to shareholders following the sale of Quilter International will take the special returns we have made to our shareholders since Listing to around £1 billion.
"We now look forward to executing the next stage of Quilter's strategic journey which will be characterised by a focus on growth and efficiency. We are excited about our plans to grow our business, increase operating efficiency and to deliver our target of more than doubling operating profits by 2025 as a modern, UK-centric, focused wealth manager."
