IFG Group has revealed it was paid £2.5m by Berkshire-based Ascot Lloyd Financial Services for IFG Financial Services, part of a trio of “traditional IFA businesses” sold to the company in a £9m deal earlier this year, despite it making it a loss.
The initial sale consideration of the business is £2.5m, which IFG confirmed today (8 September) has been received.
An additional maximum of up to £5.4m in contingent deferred consideration could yet be added to the bill, depending on future revenue targets on the first and second anniversary of the sale. IFG bosses confirmed this is payable in installments.
The price comes despite during 2013, IFG Financial Services recording a statutory loss of £500,000, which bosses said were “primarily driven by restructuring costs”. The gross profit stripping out the restructuring costs was £300,00.
The sale of IFG Financial Services was announced originally on 12 March this year. At that time, Ascot Lloyd said it would buy a trio of UK IFA businesses from Sanderson House and James Hay-owner IFG Group for an initial consideration of £3.5m in a deal that could be worth in excess of £9m.
In July this year, FTAdviser revealed that IFG Financial Services Limited is expected to rebrand following its acquisition by Ascot Lloyd, but it is unknown what the new name will be.
FTAdviser understands the rebrand will take place once the acquisition receives regulatory approval by the Financial Conduct Authority.
IFG Group said in a statement: “This is the final step in the rationalisation of our non-core UK activities and facilitates an increased focus on continued growth and development of our core UK businesses, Saunderson House and James Hay Partnership.
“The sales proceeds will further strengthen our balance sheet and facilitate continued investment in these businesses.”
