Less than a year since it acquired Arden Partners in an arduous £10m buyout, Ince today (16 November) announced it is selling off the ‘loss making’ subsidiary for just £1m.
Ince had originally revealed it was buying the mid-cap investment banking company (and its own corporate adviser) Arden late in 2021, but the completion of the deal was stalled by regulatory constraints for months, finally wrapping up in April this year.
But despite going through the drawn-out process, Ince today said Arden has underperformed financially in recent months. A stock exchange statement said: ‘The most recent audited annual results of Arden for the year to 31 October 2021 show revenues of £9.28m and a profit before taxation of £0.85m, with net assets at 31 October 2021 of £5.76m.
‘Since then the Arden revenues for the current financial year to date have declined significantly. This decline is largely attributed to the increasingly challenging fundraising market and wider economic conditions in the UK since early 2022. As a result, Arden is currently loss making and the opportunities and benefits that were identified by Ince at the time of the acquisition of Arden are now not expected to be achievable for the group, given its current resources.’
As such, Arden is being sold to financial services group Zeus at a hefty mark-down price of £1m, albeit Ince noted it will be due a further £2m in earnout consideration payable ‘based on certain Arden revenues received by Zeus in the three months following completion.’
Ince chief executive Donnie Brown, who was formerly Arden’s chief executive before succeeding Adrian Biles in July, said: ‘In challenging market and economic conditions, the disposal of Arden will allow Ince to focus its resources on its core legal business where there are increasing opportunities.
‘It also benefits Arden, whose clients and employees will become part of a much larger business that is well positioned in the London equity markets. We continue with our re-focused strategy for growth and cost rationalisation, which is already achieving positive results.’
The Arden disposal follows Ince’s decision in October to divest its Gibraltar business and earmark its Germany and Singapore arms for restructuring amid financial distress.
Earlier this month former chief executive Biles, who was removed from his position in the summer and subsequently settled a legal claim with Ince in September to the tune of £690,000, made a comeback to the legal market by acquiring London firm Child & Child.
For more on Ince’s recent struggles, see ‘Ince Gordon Dadds – Collapse of an institution?’