Wealth manager Kingswood Holdings has acquired a North Lincolnshire-based chartered financial planning firm in a cash deal worth close to £4m.
In an update to the market this morning (June 17), Kingswood announced the purchase of Admiral Wealth Management which will add 600 clients, seven employees and two advisers managing around £100m in assets.
Subject to regulatory approval, the acquisition has been agreed for a cash consideration of £4m, payable over a two-year period.
It said £2m will be paid at closing and the balance will be paid on a deferred basis, some of which is subject to the achievement of pre-agreed performance targets.
This is the firm’s first acquisition under new chief executive officer David Lawrence, who joined in December 2020 from Schroders Personal Wealth where he was chief commercial officer.
Lawrence said: "Since becoming UK CEO at the turn of the year, I have focussed on building momentum in the business and expanding our capabilities to integrate and grow.
“Our focus on enhancing the client experience is paying dividends and I am delighted that we now have approaching £200m in our internal MPS.
“I am thrilled to announce our first acquisition under my leadership and look forward to welcoming Mike Biggin, Adam Harrison, and the Admiral team to Kingswood.”
He added: "We remain absolutely committed to perpetuating our stated growth strategy within the UK and internationally.
“Whilst this is our first acquisition of 2021, we have a strong pipeline of high-quality UK opportunities under negotiation, four of which are in exclusive due diligence representing pro-forma operating profit in excess of £2.5m as we continue to grow our financial planning and investment management reach across the UK."
In September 2019, Kingswood secured £80m of funding with investment management firm Pollen Street Capital to fund its pipeline of acquisitions.
Since then, it has been on an acquisition spree, having purchased two firms last year, including Yorkshire-based Sterling Trust Financial Consulting in a deal worth close to £18m. The Admiral acquisition is the latest in Kingswood’s acquisition spree.
Kingwood also reported on its results for the year ended December 31, 2020.
It said year on year performance comparison was “difficult” given the impact of acquisitions during the year.
But it said group revenue for the year was £25.5m, a 153 per cent increase on the prior year reflecting the impact of recent acquisitions.
Operating profit for the year to December 2020 was £0.9m, and 84 per cent of UK group revenue was “recurring in nature”.
Kingswood said the 2020 revenues and operating profit do not reflect the full year impact of Sterling Trust and Regency Investments in the UK acquired during the year.
“The 12-month pro-forma operating profit run-rate incorporating the full impact of UK and US acquisitions is £7m”, it said.
Buzz West, Kingswood's chairman, said: "2020 was a challenging year and our resilience was tested on many fronts. It was a challenging year for business, especially one like ours which is built on personal relationships - those one on one, face to face connections with our clients.
“However, I have been delighted with how the business adapted and emerged from this difficult period.”
West added: "Despite the challenges, there are many positives to take from 2020 - most notably the many talented new colleagues who joined across the UK and US including through the Sterling, Regency, Chalice and Manhattan Harbor transactions.
“Our partnership with Pollen Street Capital grows in strength, and to date has provided growth equity of £44.8m to support our current and future acquisition strategy. We now have 206 people across the globe managing £6.1bn of client assets."
sonia.rach@ft.com
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