Listed wealth manager acquires IFA with £31m funds

European Wealth Group has acquired Compass Financial Benefits Limited, an IFA business with £31m of funds under influence.

Compass has been acquired for a maximum consideration of three times its recurring income for the 12 months following completion.

The consideration is payable in two tranches: an initial tranche, payable on completion, of £539,150. Half of this will be paid in cash and the other half in 269,575 new ordinary shares at a price of 100 pence per share.

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The remainder of any consideration due will be satisfied half in in cash and half in new ordinary shares, EWG said.

European Wealth also announced that it has raised approximately £674,000 via a placing of 749,303 new 5 pence ordinary shares in EWG, at a price of 90p per ordinary share.

The proceeds of the placing will be used to cover the initial cash consideration and for the general working capital purposes of the group.

John Morton, executive chairman of European Wealth, said: “We are pleased to have completed our first acquisition since coming onto the market in May.

“Whilst small, it will not only strengthen our presence in the group personal pension scheme market where we see significant opportunities domestically, but also allow us potentially to leverage our investment management services to Compass’s clients.

“We also see significant scope for improving Compass’s operating costs whilst at the same time continuing to grow our overall funds under management and influence.

“We consider our AIM listing as an important mechanism for completing further selective acquisitions as we continue to increase our funds under management and influence.”