Stake in 8AM acquired, net inflows solid

Tatton has now concluded the acquisition of 50% of 8AM Global Limited (8AM) for a total consideration of £7.0m (£3.5m payable now, funded through the issue of new shares, plus two performance-linked cash payments after 12m & 24m). Tatton has an option to acquire the remaining 50% of 8AM in due course.

The deal looks a solid strategic fit. It adds c. £0.8bn of ‘assets under influence’, with 8AM running a range of Model Portfolio Services and funds which are complementary to Tatton’s and provide existing IFA clients with an extended product range. Tatton also gains the benefit of a broader financial adviser base. The deal is expected to be earnings enhancing from FY23 onwards.

Impressively, considering market volatility and general economic uncertainty, Tatton has also reported strong net inflows over the first four months of FY23 (Apr 22 - Jul 22).

We have updated our forecasts to take the 8AM deal into account and our fundamental value / share ticks up from 530p to 540p. That is 29% above the current price.