CompaniesAug 6 2015

AFH to pay £2.8m for Devon-based IFA

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AFH to pay £2.8m for Devon-based IFA

AFH has bought Devon-based advisory firm Davisons Financial Management Limited for a maximum consideration of £2.85m.

The financial planning division of Davisons Chartered Accountants will continue as a trading style of AFH, with the accountancy practice continuing to act as an introducer.

The maximum consideration payable is based on the profitability of Davisons Financial Management hitting agreed targets over the next 24 months.

The price tag will be met with a combination of cash and the issue of new ordinary shares in AFH over the next two years.

Upfront, £1.07m has been paid for Davisons Financial Management, funded from the company’s existing cash resources, together with the issue of 71,915 consideration shares at a price of £1.46p.

Of the remaining £1.68m, no more than £945,000 will be paid in cash, with the balance to be settled through the issue of consideration shares. The consideration shares will subject to a 36-month lock-in from the date of issue.

The deal is the 13th acquisition by AFH since the company listed on Aim in June 2014.

Alan Hudson, chief executive of AFH, said he was pleased to welcome current managing director John Wright and his team and looked forward to developing the existing relationship with DCA to drive AFH’s expansion in the south west region.

“The structure of this deal, which enables the vendors to participate in any future uplift in revenue and profitability through the issue of the consideration shares and will be held for a minimum period of three years, reflects their belief that the sector has significant potential and that our business model is value enhancing.”

This deal comes after just last week AFH Financial bought Derby-based IFA Quest Financial Management for a maximum consideration of £585,000 and Blackburn-based IFA Phoenix Independent Financial Services for £489,345.

emma.hughes@ft.com