STM says the FCA has now approved the £400,000 takeover deal which transfers control of Carey’s UK SIPP business to STM.
In October last year, STM announced that it had entered into an agreement to acquire 100% of Carey Administration Holdings Limited, owner of 70% of Carey Pensions UK LLP.
Carey offers SIPP products to the UK market and owns 80% of Carey Corporate Pensions UK which offers auto-enrolment workplace pensions to UK based SMEs.
The minority shareholdings of Carey Pensions UK LLP and Carey Corporate Pensions UK are owned by Christine Hallett, who continues as managing director of the Carey Pensions businesses.
Carey faces legal action over the outcome of a SIPPs-related court case - the ‘Adams’ case - which revolves around an investor who alleges Carey failed in its duty of care by allowing him to invest in unregulated investments via his SIPP.
For the year ended December 2017 Carey Administration Holdings had revenue of £2.9m and made a pre-tax loss of £1.2m.
As a result of the takeover, STM will enter the UK auto-enrolment market. Carey’s auto-enrolment business has over 65,000 members and is expected to have revenue of £1.5m for the financial year ending December 2018.
Carey’s UK SIPP business has over 4,000 members and is expected to see revenue of approximately £1.8m for the year ending December 2018 with assets under administration of £898m.
STM says that Carey’s SIPP business will help it expand its own UK SIPP business.
STM expects £500,000 of cost savings from the integration of the two UK SIPP businesses. The enlarged UK business will employ more than 100 people and aids STM’s plan to be an increasingly UK-focused business.
In terms of the upcoming Carey court case, STM said last year it had secured indemnities and the benefit of significant existing PI cover from the sellers.
Alan Kentish, chief executive of STM Group, said: “We are delighted that Christine and her teams are joining the STM Group.
“The two UK focused pensions businesses give us some really exciting options for our growth strategy. I have no doubt that the support and stability of STM will allow the Carey Pensions businesses to flourish; they have solid product offerings and a loyal and professional intermediary base.”
Christine Hallett, managing director of the Carey Pensions businesses, said: “We are delighted that the acquisition has now finally been completed. STM’s vision for the UK market, both in terms of SIPPs and workplace solutions, as well as their support and resources, makes STM the perfect partner for us to be able to further grow successful and profitable businesses.”