Brewin offloads corporate advisory and broking division

Brewin Dolphin will dispose of its corporate and broking division to focus on investment management.

The group has signed a memorandum of understanding for the proposed disposal to a new partnership entity called N+1 Brewin.

This will be capitalised jointly by European financial advisory and asset management group, N+1, as well as senior management of the division.

Brewin Dolphin will receive a total nominal goodwill consideration of £5m for the disposal, comprising £1m cash up front and a 14% preferred interest in the new entity with a nominal value of £4m.

It will receive a 6% per annum return on its preferred interest which will be paid in priority to ordinary distributions for the period to 2017.

The division mainly advises the small and middle market and has 90 corporate and 100 institutional clients. It has raised over £1.7bn for clients and worked on deals valued at £3.4bn over the last four years

Operating profit for the division was £1.3m from turnover of £10.9m in the year ended 26 September 2010. At the year end, the division had gross assets of £33.4m and nil net assets.

Completion of the transaction is subject to contract and receipt of regulatory approval for the new entity. The division will remain part of the group until completion, which is anticipated to take place by the group's year end in September 2011.

The proposed disposal will free Brewin Dolphin from its regulatory capital requirement for the division and simplify the structure of the group into that of a pure investment manager.

Jamie Matheson, chairman, says: "This transaction will enable Brewin Dolphin to wholly focus on its core investment management business. We wish the team every success with their new partner."

Graeme Summers, head of the Corporate Advisory & Broking division and Managing Partner -elect of N+1 Brewin, adds: "The new entity will enable us to enhance our service offering for our clients by combining the strength, depth and international reach of N+1's European financial advisory and asset management expertise, with the existing skills of our team here in the UK.

"The team is very excited by the significant opportunities that lie ahead."