Strata Investment (ASX:SRT) has entered into a binding agreement to acquire Holdco, the parent company of SCP Resource Finance (formerly known as Sprott Capital Partners), an independent investment dealer specialising in the global mining sector.
The US$21.25 million ($31.33 million) acquisition marks a major strategic move for Strata as it seeks to expand its portfolio of investments in the resource sector. This initial deal is one of several transactions which the suitor is considering within the global resource finance sector.
Strata notes the deal is supported by its major shareholders, including renowned investor Rick Rule, the Flannery family’s Ilwella, and Mike Josephin.
In connection with the acquisition, Strata Investment will undertake a public offering or private placement to raise up to US$10 million. Concurrently, Holdco or SCP, will seek to purchase a convertible note in Strata, subject to having available funds.
Strata Investment expects to be reinstated to quotation on the ASX by January 2025.
Originally founded in 2017 as Sprott Capital Partners and rebranded after a management-led buyout in May 2023, SCP has raised more than $5.3 billion in capital for mining clients to date.
Since the 2023 buyout, SCP has strengthened its focus on precious and energy transition metals. Recent deals include a $200 million recapitalisation for Resolute Mining (ASX:RSG) and an $8 million raise for Unico Silver (ASX:USL).
SCP Chairman, and former CEO of Sprott Group, Peter Grosskopf will transition into the role of non-executive Chairman at Strata.
Strata CEO Michael McNeilly says the acquisition of SCP Resource Finance is a first step for Strata, integrating SCP’s experienced team and deep industry knowledge aligns with the suitor’s long-term strategy.
“We remain focused on acquiring complementary businesses in the global resource finance industry, ensuring that our investments align with our long-term strategic and financial objectives,” McNeilly says.
SCP Chairman Peter Grosskopf adds that in linking with Strata, the target’s investor and corporate clients will benefit from the increased reach and investment presence contributed by Strata and its shareholders.
“We believe the mining sector is still in the early stages of a long-term growth phase which is required to sustain and improve the production of critical and precious metals. We and Strata will together pursue synergistic opportunities which have the potential to bring capital and other financial services to our global client base,” Grosskopf adds.
Grosskopf has more than 35 years of experience in the financial services industry. As the former CEO of Sprott, Grosskopf led the company’s growth from $5 billion to more than $20 billion in assets under management between 2010 and 2022.
SCP Directors Dave Wargo and Fil Martins bring decades of investment, research, and investment banking experience to the combined Strata team.
Write to Adam Orlando at Mining.com.au
Images: Resolute
