Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

SLI/Ignis deal means cost cutting is on the horizon, experts say

SLI/Ignis deal means cost cutting is on the horizon, experts say

Following confirmation of Standard Life Investments' takeover of Ignis, analysts say the overlap between the businesses is the main factor behind the deal. 

'While we view the acquisition as likely to benefit Standard Life, we view the key driver as cost synergies,' Panmure Gordon analyst Barry Cornes said in a note.

He noted that last year, SLI had a EBITDA margin of 37% versus Ignis' 35%. The combined business will now target 45% by the end of 2017, up from SLI's inititial target of 40%.

'Obviously we need to consider relevance - the purchase price is just 4% of market cap,' Gordon Aitken, analyst at RBC Capital Markets said, adding that 'SLI clearly thinks it's a bigger deal'.

The analyst said that not only was the price a positive, but the acquisition 'looks an attractive way of offsetting the annuity headwinds,' following regulatory changes to pensions announced in this year's Budget.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter