AFH has bought Parker Sage Independent Financial Advisers Limited, an IFA providing advice in Canary Wharf and the northern Home Counties.
The deal was completed yesterday (31 May) for a purchase price of £4.5m, which would increase to £5.6m based on increases in the profitability of Parker Sage over the next two years.
Alan Hudson, chief executive of AFH, said: “The acquisition of Parker Sage is our seventh IFA acquisition this year and will be integrated in line with our established model to enhance shareholder value during the current financial year.
“Parker Sage's directors are very successful advisers who share both our values and vision for the future of the sector.
“I look forward to working with them in many years to come.”
As a result of the acquisition, Jon Cliston, Andrew Smith, Tony Goody have joined the AFH Group.
The initial consideration for the acquisition is made up of £1.875m in cash, funded from AFH’s existing cash resources and £375,000 of ordinary shares in the company based on the average midmarket share price of AFH ordinary shares over the last five trading days.
Further deferred consideration of up to £3.35m in cash will be payable over the next 24 months in two tranches, dependent on the intermediary's performance.
For the 12 month period ended 31 August 2016 Parker Sage generated revenue of £2.2m of which £1.5m was recurring, and reported profit before tax of £1.2m.