Alchemy Partners is due to clinch a deal on Friday to sell its stake in Seymour Pierce, seven years after backing a management buy-out of one of the City’s biggest small-cap stockbrokers.
The private equity group’s sale of its 29.9 per cent holding to the Seymour Pierce employee benefit trust comes as the broker attempts to mount a recovery from its first pre-tax loss in eight years.
Financial details of the transaction are not expected to be disclosed, but people familiar with the deal said Alchemy had more than recouped its original investment.
A consortium led by Keith Harris, Seymour Pierce executive chairman, and Alchemy Partners took the investment banking operation of Seymour Pierce private for £7.35m ($11m) in 2003 and kept the name of the quoted company.
The deal comes as Alchemy Partners scales down on new investments following the departure of Jon Moulton, founder. It means Seymour Pierce will be almost wholly owned by current and former staff.
Meanwhile, accounts filed by Seymour Pierce at Companies House underscore the pain that London’s broking industry has felt during the financial crisis.
The company swung to a pre-tax loss of £3m in the year to last September against a profit of £138,000 last time, weighed down by a £1.65m provision over a corporate finance fee dispute. Revenue fell from £14.3m to £13.6m.
But Mr Harris, one of the “ Red Knights” group of financiers behind a proposed move this year to buy Manchester United, maintained that the group was on the road to recovery.
The company said it had made a pre-tax profit of £4.5m in the first half of its new financial year.
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