Embark Group is to acquire EBS Management from rival Charles Stanley, creating a financial services group with 100,000 clients with £10.8bn of assets.
The combined businesses will employ over 500 people and will cover a large range of retirement and investment products including Sipp, Ssas, Isa, GIA, financial planning and corporate business activities.
The deal sees Embark pay £2m upfront for the firm, £1m after the first year and a further £1m once certain targets are met.
The acquisition has been fully approved by the UK Takeover Panel, but is conditional on final FCA approval and landlord’s consent to the granting of an underlease.
As such, Embark Group has exchanged contracts to acquire 100 percent of the share capital of EBS Management including its wholly owned subsidiaries Alpha Trustees, EBS Pensioneer Trustees, and EBS Self-Administered Personal Pension Plan Trustees.
Post the change of ownership, EBS will continue to exclusively operate and administer Sipp products under the Charles Stanley brand, distributed through both its advised and execution only channels.
Phil Smith, group chief executive of Embark, said the acquisition was one of very few remaining ‘scale’ transactions in the fast consolidating Sipp and Ssas sector.
He added that the combined businesses capabilities would improve profit margins at EBS.
“EBS has excellent people, one of the best-managed books of business in the SIPP industry, and high quality anchor distribution clients," he said. "It offers excellent value to us, and with our digital and technical capabilities, EBS will trade profitably going forward.”
All of the existing EBS team, based in London, will remain in place post sale, led by Kate Ragnauth, who will continue as principal and will join the executive team of Embark.
Speaking generally of the Sipp and Ssas markets, Mark Andrews, managing director of Redswan Wealth, said that growing regulation was a big driver of consolidation.
"Only recently I read of four Sipp firms that had failed the FCA's capital adequacy requirements, so it is only natural that there will be consolidation as firms find it increasingly difficult to operate in the marketplace," he said.