Consolidators have continued to snap up advice businesses, with serial acquirer AFH and newly rebranded KW Wealth both buying IFAs this month.
AFH Financial Group has bought Maidstone-based Core Financial Services in a deal potentially worth £7.7m ($10m, €8.6m) – the company’s largest acquisition to date.
The move sees Core’s chief executive Mark Sutton joining AFH, along with nine advisers and their support staff.
Under the terms of the agreement AFH is buying Core Financial Holdings and Core Financial Services, together with the assets of Core Corporate Planning. Core was founded in 2004 and currently advises around 2,500 clients along the south coast and in Nottingham and London.
The initial consideration is £3.2m in cash, potentially rising to £7.7m over the next 26 months, subject to performance.
The deal adds £230m to AFH’s funds under management, taking the total to around £4.5bn.
For the 12-month period ended 31 March 2018, the combined Core businesses reported revenues of £3.8m and profit before tax of £180,000.
Alan Hudson, chief executive of AFH, said: “The acquisition of Core is our sixteenth transaction of the year and significantly expands AFH’s position in the South East. I am pleased to welcome Mark Sutton and his team to AFH and I look forward to working with them to further the development of the AFH brand and continue our growth for the benefit of our new clients and to increase shareholder value.”
Kingswood expands network
Kingswood Holdings, which trades as KW Wealth, is acquiring East Yorkshire IFA firm Marchant McKechnie for a maximum of £4m, subject to regulatory approval.
The company is making an initial cash payment of £1.6m, with a deferred sum of up to £2.4 million payable in cash or, at the seller’s request and Kingswood’s agreement, Kingswood shares, subject to performance in the next two years.
KW Wealth rebranded from European Wealth last month.
Marchant McKechnie will continue to operate from its existing office in Beverley, East Yorkshire, becoming KW Wealth’s seventh regional office in the UK, after London, Manchester, Cheltenham, Maidstone, Brighton and Worcester.
Marchant McKechnie has around 700 clients and about £200m of assets under advice (AUA). The combined group will now boast over £2bn of AUA, 20 financial advisers and more than 4,000 active clients.
Marchant McKechnie generated profit after tax of £499,000 in the financial year to 31st December 2017.
Marianne Ismail, chief executive of KW Wealth, said: “The rebranding of European Wealth to KW Wealth and the acquisition of Marchant McKechnie are first steps. Our objective is to grow both organically and dynamically by acquisition in the UK and US, and we are actively looking at opportunities in both countries.
“The group has a strong and scaleable operating platform, with the capacity to support incremental revenue and earnings growth from future acquisitions, delivering improved profitability for the group as a whole.”
AFH leads the way
AFH has set the pace as one of the leading acquirers of IFA businesses and client books, making three other acquisitions in September.
Just last week it bought the client portfolios of Beaufort Securities in Colwyn Bay from its administrators for £250,000 in cash, comprising an initial payment of £50,000 and the balance being paid on the achievement of “certain milestones”.
It also recently acquired Bedfordshire-based Ashton House IFA for an initial £1.05m, potentially rising to £2.6m depending on performance, as well as the client portfolios of Salisbury-based Emery Little Financial Services for an initial consideration £870,000, potentially rising to £1.6m subject to performance.