Investments  

Rathbones has £60m war chest for further acquisitions

Rathbones has £60m war chest for further acquisitions

Rathbones' acquisition of financial planning firm Saunderson House leaves it with a £60m cash pile which can be used for future acquisitions, according to chief executive Paul Stockton.

Rathbones confirmed in a stock market announcement on June 23 that it had acquired Saunderson House in an initial £135m deal, funded with about £80m of its own cash reserves, plus a £50m share placing. 

Today (June  24) the company’s chief financial officer Jennifer Mathias told FTAdviser there was a surplus cash “cushion” of £60m if the company wanted to do more deals, with Stockton saying the company was "looking to grow, but it is not just about buying anything that comes up.”

On the rationale for acquiring Saunderson House, Stockton said: “Rathbones is very well known in investment management and has a smaller presence in financial planning, and Saunderson House has a very strong presence in financial planning, so it makes sense to combine.

"The other factor is the very strong cultural fit between the two businesses, I want to emphasise this is not a consolidator type deal for us, this is not driven by cost savings and synergies, Saunderson House is a high quality business.

"We were fortunate that Ipiris, who previously owned it, were looking to sell.”

The deal will mean the number of advisers at Rathbones rises to 80 from 25, and will have the effect of increasing the firm’s presence in London, where the number of financial planners will rise from 14 to 69.

Rathbones has tended to have a stronger presence in the provinces than Saunderson House.

But Stockton said: “Whether a firm is large or small is not the criteria, we are not trying to just grab everything in the market, and it certainly is not about trying to appear big to our clients, we want to be high quality to our clients.

"This Saunderson House deal is very similar to the one we did with Spiers and Jeffrey up in Scotland, we learned from them, and they learned from us.”

david.thorpe@ft.com