Mergers and acquisitions  

Tavistock eyes £20bn assets in 5 years as it embarks on M&A programme

Tavistock eyes £20bn assets in 5 years as it embarks on M&A programme

Tavistock Investments plans to increase its assets five-fold in the next five years and is already in discussions with two firms as part of its planned acquisitions programme.

Chief executive Brian Raven told FTAdviser the firm was embarking on an acquisition drive and was looking for medium to large acquisitions and for “quality rather than quantity”.

This comes after Tavistock announced yesterday (June 14) that it had sold its discretionary fund management arm and signed a 10-year strategic partnership with Titan Wealth Holdings.

He said: “We didn't have the credibility to talk to large businesses about acquisitions until yesterday’s announcement.

"I would say we'll be focusing on medium to large acquisitions, good quality businesses, but essentially, we're looking to buy advisory businesses - whether or not they have an asset management capability, as we do within the group. 

“There are companies that I've done my homework on that I will be approaching, there are a couple of companies that we're in discussions with already and there will be other businesses that will now get introduced to me because of what we've announced yesterday. 

“All of that I expect will mean two or three acquisitions over the next 18 months.”

Earlier today (June 15), Tavistock announced it had acquired Cambridge-based IFA Chater Allan Financial Services, adding approximately £110m to its funds under advice.

Raven explained the target firms are likely to be “valued fairly substantial” and would help to increase its current assets five-fold in the coming years.

“In terms of assets, at the moment we have about £4bn under advice,” he said. “Over the next three to five years I'd like to get that to £20bn and it would be nice to get that to £10bn within three years and I think that's doable."

He added: “We are actively engaged in discussions with at least two and I would expect at least one of those, if not more, to follow through to an acquisition, but given the time it takes, it would be quite swift if it happened in August or September.”

Raven said Tavistock was looking at companies with a minimum of £500m in assets up to much larger businesses.

Commenting on whether the prices in the M&A market are attractive at the moment, Raven said “they are fulsome.”

“For the right businesses, the sorts of numbers being paid now are at the top end from where we were but the sector has a history of prices continuing to move upwards and then we'll go through a period where they really drop down again and we're on a rising trend at the moment.”

Titan partnership

Titan acquired Tavistock Wealth for up to £40m in cash, together with a ten-year earn out.

Raven said the partnership with Titan was a “game changer” and “gives us the wherewithal to be more aggressive about our plans for acquisitions”.

He said: “It somewhat solves the problem we had and still have which was that the market cap is nowhere near reflecting the value of the company but we will get there.