Two years after a scuppered deal, London-headquartered Smith & Williamson and financial planning group Tilney have agreed to merge.
The duo confirmed that they were in talks about a possible merger in August 2019, after Tilney failed in its attempt to hijack Rathbones’ bid to acquire Smith & Williamson in 2017.
The merged business, to be named Tilney Smith & Williamson, will offer a range of services focusing on private clients, businesses and charities.
Chris Woodhouse, chief executive of Tilney, said: “The merger of Tilney and Smith & Williamson represents a compelling combination and together we will look to build on the considerable and complementary strengths of both firms.
“This is a transformational deal, which will create a truly unique business, able to support clients from across the wealth spectrum with a comprehensive range of services for both their personal wealth management and business needs.”
Smith & Williamson shareholders will receive £625m ($779m, €704m) through a combination of cash and shares in the merged business.
The shareholders will be placing the majority of their investment into the equity of the enlarged group.
The transaction values the combined business at approximately £1.8bn.
Tilney Smith & Williamson will have revenue of around £500m and earnings before tax of £150m.
The merger is expected to complete in early 2020, subject to regulatory approvals.
After the deal is completed, the combined firm will be responsible for over £45bn of client assets, of which 80% is in discretionary mandates or funds.
It will have around 280 investment managers, 260 financial planners and a professional services business with some 150 partners and directors.
The firms have decided on a strategy for the combined group.
- Create a proposition for clients covering professional services, financial planning and investment management;
- Have an expanded network across 36 towns and cities in the UK, Ireland and the Channel Islands;
- Deliver investment services; including execution-only investing, investment advisory services, centrally managed and bespoke discretionary investment management;
- Have a “multi-channel” business; including face-to-face conversations, an online platform and phone capabilities; and
- Provide clients with continuity in the relationship with their investment manager, financial planner or professional services team.
Smith & Williamson has 12 offices in the UK and crown dependencies and Ireland: Bristol, Birmingham, Cheltenham, Guildford, Salisbury and Southampton, Belfast and Dublin (City and Sandyford), Jersey; and Glasgow, with the headquarters in London.
Tilney is also headquartered in London and has 55 offices across the UK.
The board of Tilney Smith & Williamson will comprise of representatives from both firms.
Tilney chairman Will Samuel will take on similar responsibilities at the merged business and Woodhouse will be group chief executive.
Kevin Stopps and David Cobb, joint-chief executives of Smith & Williamson, will join the board of the enlarged group.
Further details of the board will be announced in due course.
Cobb and Stopps added: “The investment management and professional services market is changing rapidly, with the evolution of client needs accelerating.
“The combination of our two businesses creates real scale, broader capabilities and complementary service offerings, enabling the merged group to enhance existing client relationships and win a higher share of new business opportunities.”