Zeus Capital advises on £100m-worth of deals

Martin Green

Manchester-based Zeus Capital has advised on two deals with a combined value of more than £100m.

It has acted as financial adviser and sole broker to City of London Investment Group (CLIG), which has entered into an all-share merger agreement to acquire US-investment management company Karpus Management (KMI), for £78.4m.

And it advised Brigadier Acquisition Company on its take private of suit hire and retail group Moss Bros in a £22.6m transaction.

KMI is a US SEC-registered investment adviser, providing investment management services primarily for US high net worth clients and small corporate accounts.

As at May 31, 2020, KMI had $3.4bn in funds under management for 2,273 client accounts.

Most client assets are managed in balanced portfolios, with more than 50% invested in CEF and CEF-preferred securities.

KMI employs 36 staff, including 11 that perform investment advisory functions, including research.

CLIG intends that KMI will continue to operate as a distinct entity and a fully operational business within the enlarged entity.

The directors believe that the merger with KMI is highly complementary and represents an opportunity for significant diversification, which is in line with CLIG’s strategic plan and will reinforce CLIG’s presence in the US where it is already very well established.

The acquisition has the potential to be earnings enhancing for the first full financial year following completion.

Members of the Zeus Capital team included Martin Green, Daniel Harris, Mike Cuthbert and Ben Burnett.

Zeus Capital is an adviser to small- and mid-cap private and public companies.

Since 2013, it has acted on more than 140 transactions across public and private markets, with a gross value of in excess of £9bn.

Martin Green, co-head of FIG at Zeus Capital, said: “KMI has been a business well known to the CLIG team for a while and the merger is a watershed moment in CLIG’s history providing both scale and diversity to its business.

“It has been a privilege to work with CLIG on this transaction and Zeus looks forward to supporting the enlarged team in the future.

“The fact that KMI founders and management have elected to choose an all-share offer is a strong vote of confidence in the future for both companies.”

Barry Aling, chairman of City of London Investment Group, said: “Zeus Capital has been instrumental in guiding City of London Investment Group PLC through this trans-Atlantic merger, acting as financial advisor and sole broker.

“As chairman of the group, I am confident that our shareholders will benefit from the combination of these two respected investment management firms and we will move ahead as a stronger, more profitable entity. We are grateful to have been well-advised.”

Zeus Capital has also advised Brigadier Acquisition Company on its take private of suit hire and retail group Moss Bros in a £22.6m transaction.

The ultimate shareholders of Brigadier have extensive experience in the apparel industry with businesses in several global markets and hope to use their experience and contacts to improve the performance of Moss Bros as a privately-owned company.

Moss Bros was established in 1851 and has more than 120 stores across the UK.

The Zeus Capital team was led by Richard Hughes and Jamie Peel, and also included Dan Bate, Kieran Russell and James Edis.

This deal is the fifth that Zeus Capital has completed since the UK lockdown commenced, and also represents the fourth completed takeover code transaction that Zeus Capital has advised on in the past 12 months.

Jamie Peel, director of corporate finance at Zeus Capital, said: “The advent of COVID-19 and the UK lockdown created both technical deal complexity and real business challenges for Moss Bros, but we are hopeful that with Brigadier’s support, a heritage UK high street brand can be saved and returned to profitability.”

Michael Shina, director of Brigadier Acquisition Company, said: “Zeus Capital’s expert advice was crucial in guiding Brigadier and its shareholders through their first UK takeover transaction.

“Achieving announcement of our recommended offer on 12 March was an achievement in itself, but dealing with the impact of COVID-19 and the subsequent request to lapse the offer brought into sharper focus the benefit of being advised by a firm with deep takeover expertise and a specialism in public company transactions.”

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