Nucleus buys Curtis Banks in £242mn deal

Nucleus buys Curtis Banks in £242mn deal
Richard Rowney, group chief executive at Nucleus

Nucleus has confirmed it will buy Sipp provider Curtis Banks in a £242mn cash deal, taking its assets under administration to £80bn.

After extending deal talks last month, the two firms have now agreed on a price which is a 32.1 per cent premium on Curtis Bank's share price value at the end of November, when the offer period began. 

Nucleus has purchased Curtis Banks through a new, wholly-owned subsidiary called Nucleus Clyde Acquisition Limited, shortened to 'Bidco', which was incorporated at the end of last year.

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The deal will receive an unanimous board recommendation from Curtis Banks, according to a release published today (January 6).

FTAdviser understands more than half (53.93 per cent) of the Sipp provider's shareholders intend to support the deal. 

Shareholders are yet to vote on the deal, and it is still subject to regulatory approval. 

Addleshaw Goddard, which has advised Curtis Banks on the deal, said the current expectation was for the transaction to complete in Q2, 2023.

At the end of last year, Curtis Banks' market cap sat at around £170mn, with assets under administration of over £37bn.

Initially, Curtis Banks said Nucleus had until December 23 to confirm whether or not the deal was going ahead, but this deadline for a firm offer was extended until January 9.

Group chief executive at Nucleus, Richard Rowney, said today (January 6): "Our ambition remains to create the UK’s leading platform, exclusively for financial advisers to help them make retirement more rewarding for their customers.

"We’re already demonstrating the benefits of scale, enabling investment in technology, people, products, price and service."

As part of the deal, Curtis Banks' executive chair David Barral will receive a payment of £2mn under his incentive arrangement.

Partner at Addleshaw Goddard, Giles Distin, said the UK wealth management industry continues to be "a very active space" in relation to merger and acquisition opportunities, with further consolidation in the sector continuing apace.

"The completion of Curtis Banks's takeover is still subject to various approvals, including an approval vote by Curtis Banks shareholders and regulatory clearances being required from, amongst others, the FCA [Financial Conduct Authority]," he added.

"The current expectation is for this transaction to complete in Q2 2023."

Back in September, FTAdviser reported Nucleus was considering a handful of potential acquisition targets after platform inflows dipped to just £1mn in June and one analyst labelled the business as “struggling”.

Rowney has spoken openly about the platform’s intention to consolidate as it looks to boost the assets on its books which currently sit at around £43bn for the combined Nucleus and James Hay businesses.

The addition of Curtis Banks takes the group's overall assets to around £80bn.

Nucleus is majority owned by private equity firm HPS Investments, and fellow private equity house Epiris also owns a smaller stake.

Curtis Banks posted a 12.4 per cent decrease in adjusted pre-tax profit for the six months to June 30 this year, and assets under administration rose £1bn to £37bn in the period.