Rathbones has agreed a deal to buy advice firm Saunderson House for £150m, a move that adds £4.7bn to its assets under management and accelerates consolidation in the advice space.
The acquisition will see Rathbones’ in-house financial planner numbers increase from 25 to 80, as well as adding around 2,200 clients with an average portfolio size of £2.2m.
Rathbones said the deal would boost its financial planning assets to £8.3bn and make it the UK’s third largest wealth manager with £61bn in total AUM.
Chief executive Paul Stockton said: "Saunderson House is a high-quality business with a strong desire to deliver leading wealth management services to clients over the long term, and it will add both scale and capability to Rathbones.
Saunderson House chief executive Tony Overy added: “This transaction provides long-term ownership stability for Saunderson House to enable us to continue to focus on providing our high level of client service, developing and enhancing our proposition, and providing an excellent environment for our people as part of a well-respected and well-capitalised group."
Saunderson House clients are typically accountants and lawyers with “complex financial affairs”, according to Rathbones.
The wealth manager will pay an initial cash and share consideration of £135m, funded from internal resources and a proposed £50m share placing. Deferred compensation of £14.9m, comprised of £10.9m in cash and £4m in shares, will be paid on the first anniversary of completion.
The company said it expects to make “cost synergies from the streamlining of operational processes, having taken advantage of the best of the combined skills and capabilities of both companies”.
Saunderson House parent IFG Group was taken private by private equity firm Epiris in 2019 in a £206m deal. IFG’s other business, Sipp and platform provider James Hay, is not part of the Rathbones deal.
The acquisition is expected to complete in the third quarter of 2021, subject to regulatory approval.