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(Alliance News) - Mattioli Woods PLC on Wednesday said it will acquire asset management business Hurley Partners Ltd for up to GBP25.6 million.
The stock was trading 1.0% lower at 782.00 pence each on Wednesday afternoon in London.
The wealth management company said it will pay GBP10.6 million cash upfront, and issue 842,866 shares at 830.5p each, worth a total of GBP7.0 million. It will also pay up to GBP8.0 million cash two years after the purchase, dependent on Hurley meeting and outperforming forecast earnings.
Following payment of the initial cash consideration, Mattioli will have net cash of GBP8.9 million.
Hurley has around GBP570 million of client assets, Mattioli said.
For the year to the end of April 2019, Hurley posted pretax profit of GBP750,000 on revenue of GBP5.7 million. Net assets as at the end of the period stood at GBP2.6 million.
Mattioli expects the acquisition to be earnings-enhancing in the first full year of ownership with annual cost savings of around GBP500,000 expected to be realised by the end of year one.
"This exciting acquisition is an important step forward for Mattioli Woods, as we continue to expand our operations. We believe the range of products and services that Mattioli Woods has to offer can support the excellent outcomes from which Hurley's clients already benefit, said Mattioli Chief Executive Ian Mattioli.
"Our profit outlook for the year remains in line with management's expectations and I believe this transaction will strengthen our position in a market that is continuing to consolidate," he added.
By Ife Taiwo; ifetaiwo@alliancenews.com
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