Consolidator  

AFH buying frenzy continues with Essex IFA

AFH buying frenzy continues with Essex IFA

Financial advice consolidator AFH had bought an Essex-based IFA firm in a £2m deal.

AFH has agreed to buy Colchester-based Britton Financial Limited for a maximum purchase price of £2.08m.

Following the acquisition, Ken Kerr, the firm’s sole director, will retire and his clients will be serviced by existing AFH advisers.

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Alan Hudson, chief executive of AFH, said: “This first purchase of an IFA business during the current financial year demonstrates the continued high level of activity that we are seeing in the market.

“The latest acquisition enhances our position in the south east of England and continues our strategy of providing a stable and well capitalised business within which the clients of retiring IFAs can continue to receive appropriate professional advice and investment management.”

Under the terms of the acquisition, the initial consideration for the acquisition is £1.1m in cash, funded from AFH’s existing cash resources.

A further deferred consideration will be payable in cash over the next 26 months in two tranches, dependent upon performance criteria of Britton.

For the financial year ended 31 May 2017 Britton achieved reported profit before tax of £352,551.

AFH estimated that, on a pro forma basis, following the integration of clients to its existing advisers, this would have generated a profit before tax of £500,000.

In January AFH, which has funds under management of £2.7bn, said it had set aside £6.7m in its cash reserves to fund its acquisition activity, saying it had a "strong pipeline".

In the past six months the firm has been one of the most active buyers in the consolidation market, snapping up eight firms across the country and 14 in the current financial year.

The most recent of these was Cornwall-based Duchy Wealth Management in a £630,000 deal.

damian.fantato@ft.com