Tavistock Investments has acquired the entire issued share capital of adviser firm parent Cornerstone Asset Holdings for an initial consideration of £1 and a deferred consideration of £100,000.
Cornerstone’s assets include various books of client relationships, together with Financial Conduct Authority-regulated IFA Sutcliffe Solloway Financial Planning.
These various business interests have historically been managed on Cornerstone’s behalf by subsidiary Tavistock Partners. The proposed transaction will bring the client relationships and regulated entity into the ownership of the Tavistock group.
As a part of the arrangements, Tavistock Partners had provided funding via an inter-company account to enable Cornerstone to satisfy deferred payments due to former owners.
It had originally been intended that this transaction take place at the same time as the acquisition of County Life and Pensions, the business that was subsequently renamed Tavistock Partners, but this was prevented at the time by the existence of a clause in an asset purchase agreement.
The initial consideration for the transaction of £1 is payable in cash upon completion and the deferred consideration of £100,000 is payable on 30 June, or such later date as the parties may agree.
Tavistock may elected to satisfy the deferred consideration through the issue of 1.3m new ordinary shares of 1p each in the company at an issue price of 7.5p per share, matching the price at which ordinary shares were issued in June 2014for the acquisition of Tavistock Partners.
At the end of February, Cornerstone’s unaudited management accounts indicated that it had gross assets of £1.25m, including cash balances of £122,000, and total liabilities of £1.45m, which included £639,000 owed to companies within the group.
The vendors of Cornerstone are the three original owners of Tavistock Partners, Stephen Moseley, Kevin Mee and Paul Millott.
Mr Moseley is currently interested in 32.4m ordinary shares, representing 11.2 per cent of the company’s current issued share capital and is also Tavistock Wealth’s business development director.
As a consequence, the acquisition of Cornerstone is considered to be a related-party transaction under the Alternative Investment Market’s rules for companies.
The directors of Tavistock, having consulted with the company’s nominated adviser Northland Capital Partners Limited, consider that the terms of the acquisition are fair and reasonable for shareholders.
peter.walker@ft.com
