Apex strike deal to buy MJ Hudson's Channel Island businesses for £8m.

Tuesday 11 April 2023

The Guernsey and Jersey arms of stricken asset management business MJ Hudson will be sold for £4m. each as part of a £40m deal Apex Group has agreed to buy the company's remaining operating units.

MJ Hudson has faced deepening issues over recent months during which time its auditor EY resigned saying it has lost confidence in the company’s management and its ability to provide accurate financial information.

MJ Hudson will seek shareholder approval for the deal with Apex at a meeting in Jersey on 3 May, saying it would not have enough money to continue if it does not go through.

Most of the money is earmarked to repay the £33.7m. debt owed to Santander UK, with a warning that it is very unlikely there will be anything left for shareholders afterwards.

Pictured: MJ Hudson's Guernsey office.

MJ Hudon’s data and analytics division will be first at up to £15m, followed by the business outsourcing division for approximately £25m.

That comprises of £13m. for the Irish business, £4m. for Luxembourg business, £4m. for Guernsey and £4m. for Jersey.

“We are pleased to announce the acquisition of these businesses which will deepen our footprint in Europe, particularly with regard to ManCo and Fund Administration solutions, and will add complementary advisory services, including in the fast-growing ESG space,” said Apex Group CEO Peter Hughes.

Pictured: Apex Group CEO Peter Hughes.

“With the addition of MJ Hudson’s ManCo business, we will consolidate our position as one of the largest super ManCo providers in both the Luxembourg and Irish markets, offering scalable, pan-European solutions to clients. We look forward to welcoming new clients and 250 colleagues to Apex Group which offers a secure and supportive home for their future growth and success," continued Mr Hughes.

MJ Hudson's Guernsey business has 25 employees, while in Jersey it employs 13.

An Apex Group spokesperson said that the "acquisition will further enhance our presence in the Channel Islands, and no material changes to headcount are expected".

This is the latest in a series of strategic acquisitions for Apex Group, which has also included Sanne Group and Maitland.

Apex already employs 550 people across the Channel Islands.

MJ Hudson is headquartered in London, but has offices in 10 locations spread around the Channel Islands, the Americas and Europe.

On 17 October the company announced that it was in discussions with its auditors about “significant potential adjustments” in relation to its 2022 year-end accounts.

Then on 12 December it said that its shares, listed on Aim, would be suspended after it became aware of additional issues, including in relation to the reporting of historical trading of the business in the last financial year.

At the time the shares were trading at 13.13p, its market value of £26.7m. was down two-thirds on a year earlier.

EY resigned in February as its auditor and two days later it was confirmed that CEO Matthew Hudson had resigned.

Soon after that it emerged that an accounting review had uncovered loans to the company, some of which he personally guaranteed, full details of which the board were unaware of - including related payments to Mr Hudson’s consultancy company HCO Global.

At the end of March, MJ Hudson announced it was delaying the publication of its interim results for the six months between 31 December 2022 and 31 March.

It will ask shareholders to agree to cancelling the admission of its ordinary shares to trading on AIM when they meet in May.

It has already been announced that the  MJ Hudson's UK fund management business will be sold to Khepri Limited for £1m.

MJ Hudson had been growing its presence in Guernsey.

It launched the Guernsey fund administration and fiduciary services business in 2015 and expanded with the acquisition of Saffrey Champness in 2021.

At the time it said the deal would double its fund administration revenues in the Island.

It came soon after the acquisition of Guernsey-based regtech firm Clarus Risk, a deal done to extend the data and analytics services it could provide.

MJ Hudson acquired Anglo Saxon Trust (a Jersey-based provider of fiduciary and fund administration services) in 2015.

The Channel Islands business provides fund administration in Guernsey and fiduciary services in both islands to over 190 clients including funds, corporates and family offices.

Apex Group was founded in Bermuda in 2003 and now has more than 80 offices worldwide and 12,000 employees in 38 counties.

Main image: Apex Group's Guernsey office in Royal Avenue.