Management buy-out of ThinkEquity LLC

The Board of Panmure Gordon announces that it has reached agreement, subject to regulatory consents, for the transfer of the majority of the equity in its US subsidiary, ThinkEquity, to its management.

Management of the US business will subscribe for not less than $500k of preferred shares in a newly formed limited liability company and Panmure Gordon will subscribe for $345k of such shares, the Panmure Gordon cash being funded from existing resources held in Panmure Gordon US Holdings LLC, the intermediate holding company of ThinkEquity. The newly formed limited liability company will acquire ThinkEquity for a nominal amount and will be free to raise additional capital. Panmure Gordon will have a pre-emptive right in respect of new share issues.

While Panmure Gordon owns more than 10% of the outstanding equity interest of the newly formed company, it will be entitled to a Board seat, and ThinkEquity and Panmure Gordon will enter into a working and co-operation agreement to continue to exploit the strong connections between the two firms for the mutual benefit of clients. Panmure Gordon and ThinkEquity have also reached agreement on the sharing of potential costs in relation to legal claims which are being defended with a maximum contribution by Panmure Gordon of $900k.

ThinkEquity was acquired in 2007, just before the onset of the global financial crisis. In the view of the Board of Panmure Gordon, it appears unlikely that ThinkEquity will be able to produce an acceptable level of profitability in the foreseeable future while remaining its subsidiary. This sale to the management also provides the opportunity to attract new, external capital and removes the requirement for further funding from Panmure Gordon.

Following the divestiture of ThinkEquity, Panmure Gordon will focus the Company’s resources on its core UK business where it sees considerable opportunities.

A further announcement will be made in due course following receipt of the appropriate regulatory consents.

Ed Warner, the Chairman of Panmure Gordon, said:

“Market conditions have changed beyond all recognition since the acquisition of ThinkEquity, and 2011 was again a much more difficult year than we had expected. I appreciate the efforts of everyone who has tried to make the business a success under Panmure Gordon’s ownership. However, it has failed to achieve profitability, and in the view of the Board has a far greater chance of success owned and managed by the local management under a partnership model.

We believe it appropriate to focus the Company’s activities on our UK business, where, after a difficult few years, we are seeing an improvement across the business in 2012 with a stronger performance in Institutional Equities and an encouraging Investment Banking pipeline. The UK business is in good shape, has won a significant number of clients since the start of 2011, and, with the full backing of QInvest, is well placed to take advantage of market opportunities.

We wish everyone at ThinkEquity every success for the future, and we look forward to working with them on joint mandates and in the interests of mutual clients.”

Enquiries:

Panmure Gordon
Ed Warner
Tim Linacre 020 7459 3600

FTI Consulting
Billy Clegg 020 7269 7157/07977 578153
Ed Gascoigne-Pees 020 7269 7132/07884 001949

Grant Thornton (NOMAD)
Gerry Beaney
Salmaan Khawaja
Jen Hatter 020 7383 5100

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