The wave of consolidation gripping the adviser platform space has been mirrored in the consumer market, with Interactive Investor set to buy its rival The Share Centre.
Interactive Investor announced this morning (February 17) it had agreed on the terms to buy The Share Centre and combine the two businesses.
Through the move Interactive Investor will acquire the entire issued and to be issued share capital of The Share Centre for the price of £61.9m.
Interactive Investor said direct to consumer platforms required scale to sustain the level of profitability necessary for significant and ongoing technology investment in customer experience and services, so claimed there was “strong strategic rationale” for consolidation in the market.
The move will combine Interactive Investor’s £30bn assets under administration with The Share Centre’s £5.3bn to create a £35bn consumer platform — the second largest after Hargreaves Lansdown.
Richard Wilson, chief executive of Interactive Investor, said: “We are delighted with this transaction.
“The firms’ shared values and combined strengths reinforce Interactive Investor’s position as a leader in the retail investment services marketplace. With our fair flat fees we have built a strong and compelling alternative to percentage fees, in a business that puts the customer first.”
Gavin Oldham, executive chairman of The Share Centre, said he was delighted to welcome this combination of the businesses, adding the move was designed to transform the prospects for individual share ownership and personal investment across the UK.
The pace of merger and acquisitions activity in the platforms market has been on the up over the past few years.
In the advised space Embark’s expansion in the platform space continued in November with the company’s acquisition of the Zurich platform, just months after it bought the advised business of Alliance Trust Savings from Interactive Investor.
Just last week a letter to advisers revealed Ascentric was in preliminary discussions involving the sale of the Royal London platform business.
Private equity firms have also reared their heads into the platform world. Epiris bought the James Hay platform last year while Wealthtime was snapped up by AnaCap Financial Partners earlier this month.
imogen.tew@ft.com
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