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EVC making Evolution to investment banking

EVC Christows is powering toward its ‘consistently stated aim’ of becoming a new niche investment bank with its acquisition of research and analysis firm Evolution Capital.

 

EVC Christows is powering toward its ‘consistently stated aim’ of becoming a new niche investment bank with its acquisition of research and analysis firm Evolution Capital.

EVC Christows (EVC) finance director Adrian Graham told Citywire that there are very few investment banks focusing on the small and medium business sector. ‘You have retail at one end, and very high end investment banks at the other, and very little in the middle. That’s the niche we’re going for,’ he said.

Graham admitted that Beeson Gregory, the broker and investment bank that specialises in high technology, is however in a similar niche.

In October, when technology investor eVestment bought Christows, chairman Oliver Vaughan told Citywire that the merged company would be the sort of ‘niche merchant bank’ that eVestment had envisaged growing into more than a year ago.

Evolution Capital has a team of some 12 City analysts who specialise in upcoming areas such as nano-technology and wireless technology.

‘They are a very capable, highly experienced team from very high level City backgrounds’, Graham said.

EVC Christows will pay a total of £12.5 million in shares for Evolution. In order to complete the deal, the company is asking warrant holders to exercise their warrants and further subscription rights early, by 6 April. The carrot to encourage agreement is that warrant holders will get a discounted exercise of all remaining warrants and subscription rights.

The advantage to the company is that not only does it get its cash quicker, but it will also be able to simplify the structure of the company. The combined company will be known as The Evolution Group.

The company also hopes to consolidate its shares with a one for ten ordinary share and warrant consolidation. ‘This will give us a much simpler capital structure and a grown up share price,’ Graham said.

Three of the Evolution team will the board of the combined company. Oliver Vaughan will step down as chairman to become non-executive director. Alex Snow takes over as chairman and chief executive. Two other EVC directors, Chris Roberts and Jackie Donnelly will resign from the board.

The company has called an EGM for 26 March to approve the warrants and share issues, but the acquisition itself its not subject to shareholder approval.

Shares are currently unchanged at 8p.

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