Mattioli Woods has acquired the entire issued share capital of Buckingham-based advisory firm Boyd Coughlan for a total consideration of up to £7m, prompting a fresh capital raising to provide funds for further advice sector buyouts.
In a trading update issued today (19 June), the wealth management and employee benefits business stated that the deal will add over £160m of assets under advice and is expected to be earnings enhancing in the first full year of ownership.
As a result of this transaction, Mattioli said it expected surplus capital currently allocated for acquisitions to be used up.
As a result it has also announced a fundraising worth up to £18.6m by way of a firm placing of up to 2m new ordinary shares and a conditional placing of up to 1.8m new ordinary shares at an issue price of 490 pence per share.
On the basis that both placings are completed, the total number of shares will represent 15.6 per cent of the enlarged issued ordinary share capital of the company. The placing is still conditional upon the passing of the resolution at the general meeting, to be held on 7 July.
Boyd Coughlan’s management team will be retained by Mattioli Woods following the acquisition. The placing of shares on the Alternative Investment Market to complete the deal is anticipated to occur on 23 June.
“The acquisition provides the group with a wider audience for its products and services, and extends the employee benefits proposition, at the time when the drive towards total reward and flexible benefits is expected to create new business opportunities in the corporate market.”
“The placing will provide the company with the flexibility to take advantage of further acquisition opportunities, of which another has been identified and, in relation to which, non-legally-binding heads of terms have been signed,” stated the update.
Ian Mattioli, chief executive of the group, stated that Boyd Coughlan is an “excellent strategic fit”, offering real synergies with the wider group.
“The acquisition gives us the ability to offer our pension, property and investment products to Boyd Coughlan’s clients and to offer enhanced employee benefits services to Mattioli Woods’ clients, strengthening our market position.
“It is our ambition to continue expanding Mattioli Woods’ operations both organically and by acquisition,” he continued, adding that “raising capital now will give us the flexibility to pursue both existing and new acquisition opportunities as they arise.”
In terms of current trading, total client assets under management, administration and advice increased by 17 per cent to £5.4bn as at the end of May 2014, of which discretionary assets under management accounted for over £1bn.
Strong growth in core pension and wealth management business, helped by the pension freedoms, more than offset anticipated falls in banking income due to new rules on liquidity cover further reducing the margins available, and employee benefit revenues, as the corporate pensions market transitions to a fee-based proposition prior to the abolition of provider commissions in April 2016.
Mattioli Woods also gave more details on the development of its bespoke pension administration and wealth management platform, to include employee benefits, with the first phase of the new platform implementation expected to ‘go live’ in the third quarter this year.
peter.walker@ft.com
