Your IndustryJun 7 2018

European Wealth's US deal falls through

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European Wealth's US deal falls through

European Wealth Group has pulled out of its deal to buy US broker-dealer firm Newbridge Securities Corporation and its affiliated investment advice business.

The deal had been signed off by the US regulator, the Financial Industry Regulatory Authority, but as European Wealth conducted the final stages of due diligence, the two companies were not able to come to an agreement on the remaining conditions of the sale.

In a statement this morning (7 June) European Wealth said the two companies had mutually agreed to end the deal and Newbridge has informed the US regulator the transaction has been officially terminated.

The acquisition would have seen European Wealth expand into the US and rebrand as Kingswood to reflect its global nature, and this will still go ahead.

Marianne Ismail, chief executive of European Wealth, said: "While we have decided not to proceed with the acquisition of Newbridge, we remain committed to our strategy and are ambitious to grow both organically and dynamically by acquisition in the US and Europe.

"Since my appointment in September, we have conducted an extensive strategic review of the operating businesses and put in place a significant number of positive measures to position the group for growth, to markedly reduce operating costs and to grow assets under management and recurring fee income.

"As a result of the recent fundraising the group is debt free and well-positioned to take advantage of the long-term growth opportunities present in the global wealth management and financial planning market."

Last month the Aim-listed company issued 2.1 million new shares which were bought by a number of directors and helped eliminate its debts.

The acquisition would have immediately doubled the assets under management on European Wealth's platform to around $4bn (£2.9bn) and provided direct access to all but one US state.

European Wealth, which is based in Cheltenham, has assets under management of £1.74bn.