Brainspark (AIM: BSP) has agreed to subscribe for 25 million new ordinary shares in Daniel Stewart (AIM: DAN) for a total of £0.5 million, giving it a 6.66% stake in the company, while also acquiring an option - exercisable at Brainspark's discretion - to purchase a further 75 million shares by 29 June 2010.
Both the purchase and the option are for 2 pence per share in Daniel Stewart. Should the option be exercised, Brainspark chief executive Alfredo Villa will join Daniel Stewart’s board as a non-executive director.
Daniel Stewart is an AIM-listed financial services company providing a range of investment banking services to small cap publicly traded and non-publicly traded companies, currently acting for 50 AIM companies and seeking to increase its client base. The company generated revenues of £4.38 million for the year ended 31 March 2009 and a pre-tax loss of £2.25 million, while the assets stood at £4.1 million at 30 September 2009.
The acquisition falls in line with Brainspark’s strategy to set up a structured group of companies with strong synergies to its core investment Mediapolis Investments SA by the end of the current year.
“Our decision to enter into the financial services sector has been a long-term goal of the company...our investment in Daniel Stewart will provide us with the professional capabilities, expertise and placing power to facilitate our future investments, should we require it. We are also hoping to utilise their experience to become involved with AIM Italia, where together we can establish a successful smaller company market in Italy,” said Brainspark chairman Francesco Gardin.
Disclosure: The author holds no positions in the company