Westhouse Holdings PLC : Exchange of contracts to acquire Arbuthnot Securities

18 November 2011 Exchange of contracts to acquire Arbuthnot Securities

Westhouse Holdings PLC ("Westhouse" or the "Group") (LSE: WHL), the corporate and institutional stockbroking group, is pleased to announce that it has now exchanged contracts on the acquisition of Arbuthnot Securities Limited ("Arbuthnot Securities"), the investment banking subsidiary of Arbuthnot Banking Group PLC (LSE: ARBB), for a consideration of £1 million in cash, the issue of 1,250,000 ordinary shares in Westhouse (currently valued at approximately £587,500) and the issue of a further tranche of the existing Perpetual Convertible Loan Note amounting to £350,000. Arbuthnot has agreed to retain its shareholding in Westhouse for a minimum of 12 months.

Agreement on heads of terms for the transaction was announced on 9 November 2011 and completion is subject to the approval of the FSA.

Information on Arbuthnot Securities

Arbuthnot Securities is an integrated investment bank servicing small and medium sized companies with a strong, well established franchise in this sector in London, the regions and Scotland. The business offers a full range of services from corporate finance through to equity research, sales, trading and market making, with 55 corporate clients, and it has expertise across a wide number of industry sectors.

For the year ended 31 December 2010, Arbuthnot Securities achieved turnover of £17.0 million with a profit before tax of £1.0 million. Net assets as at 31 December 2010 amounted to £6.4 million.

Interim accounts for the six months to 30 June 2011 show that Arbuthnot Securities had a turnover of £4.0 million for the period with a loss before tax of £3.4 million. Net asset value as at 30 June 2011 was £3.5 million.

Information on the enlarged group

Westhouse and Arbuthnot Securities are of similar size and the combined business will be the "number 1" ranked stockbroker to AIM companies (based on the Q4 2011 Morningstar Professional Services Ranking Guide), acting for over 90 clients, with particular expertise in natural resources, investment funds, technology, support services, financial services and UK industrial and growth companies.

Rationale for the acquisition

The directors of Westhouse ("Directors") believe that the greater critical mass of the combined businesses will provide an enhanced service to both corporate and investor clients through a wider, and complementary, range of sector expertise, a stronger voice in the investment market and a larger and enhanced sales and trading ability giving greater access to capital and investment opportunities. It is anticipated that the synergies of combining the businesses will also enable the Group to benefit from an improvement in the recurring revenue to cost ratio.

Westhouse's stated strategy is to play a leading role in the consolidation of the small to mid-cap broking and advisory sector and the Directors believe that there will be further opportunities from which Westhouse will be well placed to benefit.

The Directors are looking forward to combining the securities businesses of Arbuthnot and Westhouse, to create a strong, ambitious and well capitalised firm which is a market leader in the sector, and so provide improved returns for shareholders.

Garth Milne, Chairman, commented: "Small and medium sized companies provide the life blood of the UK economy, and quoted companies are experiencing continued need for high quality service, advice and support in the investment community to thrive in the current challenging environment. We believe that the enlarged group is excellently placed to provide this."

For further information: 

Westhouse Holdings plc
Christopher Getley, Chief Executive	Tel: [phone]
Smith & Williamson Corporate Finance Limited
Azhic Basirov/David Jones	Tel: [phone]
Millbrook Partnership
Tim Grey	Tel: [phone]

Notes to editors

Westhouse Holdings PLC

Westhouse is a corporate and institutional stockbroking group with particular sectoral expertise in natural resources, investment funds, UK industrial and environmental technology. Regionally the group's clients have significant exposure in Europe, Africa, Central Asia and China. Through its subsidiary Smith's Corporate Advisory, Westhouse has a strong focus on widening share ownership for quoted companies of all sizes.

Westhouse Securities is authorised and regulated by the FSA, is a member of the London Stock Exchange, a NOMAD for AIM listed companies and a Sponsor of Official List companies. Smith's Corporate Advisory is authorised and regulated by the FSA.