AFH hopes to raise £10m by issuing new shares, the company announced this morning (20 March).
The money will go towards buying more financial advice businesses following the purchase of five firms since October.
The shares will be priced at £1.75 each and Alan Hudson, the company’s chief executive, has agreed to sell up to one million of his own shares if demand outstrips supply.
In a statement issued this morning, AFH stated: “The board believes that the opportunity exists to acquire appropriately priced businesses and that the net proceeds of the placing will provide the company with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes.
“The near-term pipeline is particularly attractive, with four potential deals currently at various stages of the due diligence and engagement process.
“In addition to these four potential deals, the company continues to assess other potential acquisitions to further accelerate its growth.”
During 2016 AFH only made two acquisitions – East Anglian firm CRS Financial Planning and Lancashire-based David Rushton Associates.
Mr Hudson said the lack of activity was due to his desire to focus on “shareholder value”.
But since October – the start of AFH’s accounting year – the consolidator has made a total of five acquisitions.
In its most recent results, published in January, AFH posted profits of £1.7m for 2016, increased by 43 per cent on the previous year, and revealed it had set aside £6.7m for acquisitions.
damian.fantato@ft.com
