South African banking group Investec is to buy the IFSC-based Gandon Holdings in a deal believed to be valued at around £40 million. The deal, which was confirmed yesterday will take around an estimated four months to complete.
Gandon, which was put on the market earlier this year specialises in foreign exchange and interest rate products as well as structured finance money market trading and corporate banking. It is currently owned by US-based financial group GE Capital.
Gandon chief executive, Mr Michael Cullen, said last night that the move was a very positive development for Gandon. The company employs 51 people and he said all the teams were being retained.
The company expected to expand its current workforce in coming weeks, he added. It is understood that there were at least two underbidders for Gandon, but the company and its owner believed Investec would be the best fit. Investec currently does not have a presence in the Republic.
In a statement Investec's chief executive Mr Stephen Koseff said the acquisition was an exciting opportunity for Investec. "It is an important link into the Irish corporate and institutional market and further enhances our international capabilities," he said. Mr Koseff said Ireland had demonstrated enviable economic growth and its potential for further development looks promising. He added that Gandon's business fits in well with Investec's existing structured finance and treasury operations.
At one stage it was mooted that GE Capital might be interested in Gandon's structured finance division. However, sources said this was one of the most attractive parts of Gandon and if retained by GE, would have placed considerably less value on the remaining operations.
Investec provides asset management and private and investment banking services. It has operations in Britain and South Afirca. At the end of March last it had £43 billion (€54.5 billion) in assets under administration. Shareholders funds were £1.06 billion. The group earns more than 50 per cent of its income outside South Africa. Gandon was established in 1998 and claims to be the first institution to get a licence to operate from the International Financial Services Centre, which now hosts more than 400 companies. Gandon was established with £33 million backing from British and Irish institutions. Different parts of the company were later sold off, including some operations to Woodchester. The current set-up was sold as part of Woodchester Investments, which in turn was bought last year by GE Capital for £591 million. Gandon, and its Shannon-based associated WILMS made pre-tax profits of £6.4 million last year.
Those involved declined to say how much Investec is paying, but it is thought to be around £35£40 million, somewhat lower than previous media estimates of £50£60 million.
Gandon is expected to work closely with Investec's UK operation which offers a range of banking services to private and corporate clients, including medical finance and stockbroking.
Getting the necessary regulatory approval for the deal is expected to take several months. However, Gandon does not expect there to be any regulatory problems.
