A company owned by Kingswood's chief executive and non-executive deputy chairman is set to take a majority stake in the wealth manager, in a deal worth £2.1m.
KPI Limited, owned by a private investment partnership wholly owned by Gary Wilder and Jonathan Massing, has agreed a conditional sale and purchase deal for the 17.46 per cent stake in Kingswood Holdings currently owned by Astoria Investments (UK) Limited.
Mr Wilder, chief executive at Kingswood, and Mr Massing, the company's non-executive deputy chairman, currently own a 38.85 per cent stake in the wealth management group.
The agreement will see KPI purchase all of Astoria's 28,059,272 ordinary shares in Kingswood for 7.5 pence each.
The deal will see Mr Wilder and Mr Massing take a majority stake in the Aim-listed wealth management group, which currently has 4,500 active clients and around £2bn of assets under management and advice.
A KPI spokesperson said: "KPI sees significant upside in the strategy that is being pursued and executed by the team at Kingswood and as it took the opportunity to enter into a conditional contract to increase its equity interest in the company, reflecting its view that the company is deeply undervalued."
Last month Kingswood confirmed it was in the process of securing "substantial" funding to support its pipeline of planned acquisitions, which it previously said was in excess of £100m.
The company said it had agreed "non-binding heads of terms" for a potential equity investment, with the investor set to become a shareholder in the business as part of the deal.
The wealth management group said it was pursuing acquisitions in the UK and internationally, confirming a "number" of deals were in the advanced stages of negotiation.
Kingswood has begun its expansion into the US this year, appointing a US chief executive, Najib Canaan, as part of its international plans and taking an initial stake in Manhattan Harbor, its first US partnership, two months later.
rachel.addison@ft.com
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