London-based Brooks Macdonald Group plc said it agreed to acquire Edinburgh-based asset manager Cornelian Asset Managers Group Limited from its shareholders, including senior management.

“The total net consideration is expected to be up to £39m, with initial consideration being £31m, of which £22m will be paid in cash and £9m in Brooks Macdonald shares,” said Brooks Macdonald in a stock exchange statement.

“A further contingent cash consideration of up to £8m is payable depending upon Cornelian meeting certain pre-agreed performance targets relating to the retention and growth of client assets as well as the realisation of cost synergies.  

“Completion is expected to take place in the first quarter of 2020 subject to regulatory approval.”

Brooks Macdonald separately announced an equity placing to raise up to £30 million to fund the cash element of the deal.

Cornelian has funds under management of around £1.4 billion, and the deal increases Brooks Macdonald’s pro forma funds under management by 10% to £14.7 billion.

Brooks Macdonald CEO Caroline Connellan said: “From the outset of our discussions with Cornelian, we have been struck by the complementary cultures, investment processes and business models of the two firms, with both having a strong focus on clients and intermediaries. 

“We are delighted that we have been able to agree a transaction that brings additional multi-asset capability and distribution strength into the Group. 

“The transaction creates value for our shareholders and crucially will provide benefits for both firms’ clients and the intermediaries with whom we work.  

“The acquisition of Cornelian is a significant step forward in our medium-term strategy of delivering sustainable, value-enhancing growth.”

Cornelian CEO Jeremy Richardson said: “Throughout our discussions with Brooks Macdonald, we have been impressed by their strong client focus and growth aspirations. 

“It has been client and intermediary support over many years that has enabled us to build a successful business.  

“Therefore, it was important to us to find a company with a similar culture and investment philosophy, and critically one that we were confident would provide the highest levels of service to our clients and intermediary supporters.  

“We are very pleased to be joining Brooks Macdonald.”