Pension SuperFund Capital (PSF) has reached an agreement to acquire pension services provider and Options Pensions parent company, STM Group, for £35.6m.

PSF’s purchase of STM through Bidco, which was formed for the purposes of the acquisition, could rise to £39.8m if the deferred consideration reaches its full value.

The cash consideration values the ordinary share capital at 60 pence per share, while the maximum acquisition value, which assumes full value is delivered by the deferred consideration units, values shares at 67 pence each.

Alongside PSF’s acquisition, the firm’s Sipp companies will be purchased for £4.5m by Pathlines Holdings, which is controlled by STM CEO, Alan Kentish.

PSF co-founder, Edmund Truell, said he was “delighted” to back Bidco to acquire STM after a period of extensive diligence and strategic planning.

“This exciting investment aligns with our wider market aim to provide a complete solution, worldwide, to pension savers and sponsors and improve pensioner outcomes in an aligned way,” he continued.

“We strongly believe our track record and stewardship will enable us to provide increased security and value-for-money benefits to members, while also helping to deliver the upside that the Mansion House reforms intend.”

STM was initially formed to consolidate corporate and trustee service providers operating in international jurisdictions, and subsequently expanded into the international pensions market.

It has operations in the UK, Gibraltar, Malta, Spain and Australia, and offers products covering life assurance, Qualifying Recognised Overseas Pension Schemes, UK workplace pensions, Sipps, Group Pension Plans, pension consultancy, and an Australian pension administration company.

STM chair, Nigel Birrell, commented: “The STM Board is pleased to be recommending Bidco's offer for the company, which represents a significant premium in cash to the STM share price prior to the commencement of discussion with Bidco and offers certain value for our shareholders, and potential future benefit through the deferred consideration units.

“Whilst we believe that there are significant growth and value realisation opportunities for STM in the short to medium term, we recognise that there are uncertainties and risks which may impact STM's ability to both optimise growth as a stand-alone quoted entity, and to execute a realisation strategy of certain parts of the business.

“We acknowledge the additional commercial benefits which could be obtained as part of a larger group such as PSF, whose management team has a clear vision to deliver a complete solution to pension savers and members.”

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