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Goodbody acquisition by consortium of Chinese strategic investors led by Zhongze group Back
July 31st 2018: Goodbody Stockbrokers is to be acquired by a consortium of Chinese strategic investors who will take 100% ownership of the company. The deal is planned to close at end 2018, and is subject to regulatory approval.
The acquiring Chinese consortium is led by the Zhongze Group, a Chinese state owned investment holdings company, with a broad sectoral investment mandate. The Zhongze Group is supported in the transaction by Pioneer Century Limited, a privately owned Chinese investment company, and Zhongze’s financial advisor, JIC Trust Co. Limited, an asset management company wholly-owned by CIC, China’s sovereign wealth fund. Dillon Eustace acted as legal advisor for Zhongze Culture Investment Holdings Ltd who spearheaded a Chinese investment consortium bid to acquire Goodbody in Ireland.

Price details of the deal have not been disclosed, but the deal was speculated in media reports to be valued in the region of €150m. Grant Thornton advised Zongze on the deal, regulatory, and on tax. Dillon Eustace acted as legal advisor for Zhongze Culture Investment Holdings Ltd who spearheaded the Chinese consortium.

"Having had a hugely supportive shareholder in Fexco over the past seven years, it is extremely important to us that such a high calibre and well capitalised investor group will be working with us to develop the business for the next phase of Goodbody’s growth in Ireland and the UK", said Goodbody's CEO Roy Barrett, in a statement tonight.

As with many outbound Chinese M&A deals, the transaction is structured as a consortium deal. The investor group’s acquisition of Goodbody aims to meet its two key criteria: to seek overseas growth-oriented investment opportunities; and to expand into strategically important sectors that are underdeveloped in the domestic Chinese marketplace.

"The additional capital support from this new ownership structure will give Goodbody the ability to accelerate our ambitious growth plans both in Ireland and abroad, and will set us apart from many of our competitors. Access to the consortium’s partner network in China should also present compelling opportunities for our corporate clients in the world’s fastest-growing economy.

"The consortium wants to leverage Goodbody’s expertise in our key business areas to help develop their own in-house capabilities in investment banking, wealth management and asset management sectors.

"Put simply, we believe that this deal facilitates the creation of a bridge from east to west and vice versa for institutional capital seeking opportunities in both regions", said Mr Barrett.

Following the completion of the deal, Goodbody pland to retain its brand. The firm will continue to be regulated by the Central Bank of Ireland and its UK operation will also continue to be authorised and subject to limited regulation by the Financial Conduct Authority. Goodbody will retain all 310 staff at its offices in Dublin, London, Cork, Galway and Tralee.

The deal is an 'endorsement of our strategy' said Barrett. 'The consortium spent a substantial amount of time seeking the right European partner, and focused on Goodbody because of its highly experienced management team, deep industry and sector expertise, and outstanding heritage as Ireland’s longest established stockbroker. In light of Brexit and the acquisition by Euronext of the Irish Stock Exchange, an EU-based operator with a UK presence such as Goodbody offers the consortium the flexibility to achieve its strategic goals in the region. The deal is also a resounding endorsement of Goodbody’s growth strategy of the last seven years, supported by Fexco, and is a clear signal of intent as we continue to build a market-leading business in Ireland and the UK'.
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