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(Alliance News) - Wealth management firm Kingswood Holdings Ltd on Wednesday said it has acquired WFI Financial for up to GBP14.0 million in cash.
Kingswood has already exchanged contracts for the financial planning company's book of business and will pay a maximum of GBP14.0 million, payable over a 30-month period. Of this, GBP3.5 million is payable upon closure of the acquisition - likely at the end of September.
The remaining balance will be paid based on "pre-agreed asset migration, recurring revenue and [earnings before interest, depreciation, taxation, and amortisation] hurdles" with a final payment due February 2022.
In the most recent financial year to June 30, the Sheffield-based financial planning business generated Ebitda of around GBP1.8 million.
The acquisition is part of Kingswood's plan to expand further into the midlands and northern region of England. Kingswood separately is planning a subscription for a significant investment via irredeemable convertible preference shares. The capital injection aligns with Kingswood's plan to pursue acquisitions internationally and in the UK. The WFI buy does not depend on this investment.
Kingswood Chief Executive Gary Wilder said: "The acquisition of WFI doubles the size of our wealth planning business and provides Kingswood with an opportunity to own a very profitable regional financial planning business with built-in expertise and capacity to expand. Both principals, Charlie Gillespie and Mark Rendall, are exceptional individuals with great track records in the industry and they will remain with the group post integration and assume expanded roles on the Kingswood platform. They, along with their excellent team, will continue to focus on their core strengths of client advice and business development, with Kingswood centrally managing regulatory & compliance, finance, HR and IT responsibilities. There is also a major opportunity to migrate existing and new clients across to Kingwood's DFM platform, especially onto our recently re-launched Managed Portfolio Service offering, underpinning the value of a fully integrated wealth management business."
Shares in Kingswood were untraded at 8.00 pence in London on Wednesday afternoon.
