Listed IFA AFH Financial has bought Kidderminster-based KL Plester Financial Services Holdings for £1.7m, marking its seventh acquisition since the firm listed on Aim in June 2014 and the fourth during the current financial year.
Under the terms of the acquisition, announced today (10 February), the maximum consideration payable by AFH is £1.72m in cash.
On completion £745,200 will be paid, followed by up to £972,000, payable over the next 26 months in two tranches, “dependent upon the performance” over the next two years.
The acquisition will add about £600,000 a year of recurring revenue to the company.
Jon Rowe and Keith Plester's clients will be taken over by AFH's existing advisers following their retirement on completion of the deal.
Peter Machin, a director and shareholder of Plester, will join AFH with immediate effect as a financial adviser.
AFH’s existing cash resources are being used to fund the purchase. In December, the firm raised £1.9m, following it launching a fundraising initiative by issuing a fresh round of up to £3m in unsecured loan notes.
Last month, AFH announced that its funds under management have exceeded £1bn, signalling growth of £100m since a trading update in November that showed funds were around £900m.
Recent purchases include Knight O’Byrne, Finlay Gow and Company and Hindsight Financial Services, meaning that by January the total adviser count stood at 137.
Alan Hudson, chief executive of AFH, said: “It is good that the flexibility of our acquisition model accommodates the varying needs of the principals within the business.
“In this case, allowing the retirement of Jon and Keith, and the continuance of Peter’s career within a larger group, with all three able to crystallise the value in their business.”
emma.hughes@ft.com
