Brewin buys Wise for pounds 24m

THE stockbroking group Brewin Dolphin yesterday completed its pounds 24m purchase of Wise Speke, the private client broker, from the insurance agency Ockham Holdings.

Brewin Dolphin claimed the deal would make it the second-largest private client stockbroker in the country after Greig Middleton with 64,000 clients and pounds 12bn under management. It said the acquisition would also strengthen its geographic coverage, particularly in the North of England. Wise Speke is based in Newcastle.

The deal is being financed by a placing and open offer of 4 for 13 shares at 368p, raising pounds 24.5m net of expenses.

Brewin Dolphin forecast it should make a pre-tax profit of pounds 5.75m in the six months to 26 June and said the acquisition would enhance its earnings per share in the first full year of ownership.

Brewin said it might make a deferred performance related allocation of shares with a value of up to pounds 11m to Wise Speke's management.

Wise Speke has 19,000 client accounts and has pounds 2.5bn under management. The business recorded a pre-tax profit of pounds 3.4m last year including a pounds 1m exceptional gain from disposals. Net assets were pounds 6.8m.

Ockham's strategy is to specialise in non-standard motor insurance in Britain. It will use the proceeds of the sale to fund further underwriting of its Highway motor insurance business.

Ockham said yesterday that it intends to pay an interim dividend of 1.6p for the six months to 30 June. Its shares closed 9p higher at 154.5p.