Manx Financial to buy IFA contracts for £1.7m

(ShareCast News) - Manx Financial Group is to buy two independent financial adviser contracts books from its rival in the Isle of Man for £1.7m.The AIM-listed company's subsidiary Edgewater Associates, an Isle of Man-based retail independent financial adviser, has agreed with Knox Financial Services to buy the majority of its business on the island.The acquisition, subject to regulatory approval, includes about 4,000 clients, along with six members of staff, which generate income of up to £300,000 a year.After three months Edgewater Associated will also be able to buy the remainder of the IFA business which includes about 150 clients, making an income of up to £100,000 a year.Of the £1.7m, £900,000 will be paid on completion, £200,000 will be paid after nine months, and a final payment will be made on the first anniversary of the acquisition.Edgewater Associates' anticipated operating profit, including the acquisitions, is expected to increase by more than £400,000 a year and its combined assets under management will grow between £90m to £300m.After the acquisition, the total number of clients will be in excess of 11,000, which is 13% of the Isle of Man's population.Denham Eke, chief executive of Manx Financial, said: "Our investment in systems means that we will be able to operate the businesses at a reduced cost, both to the benefit of clients and our profitability alike. I anticipate that this will be the first of a number of market consolidations."Shares in Manx Financial were up 5.26% to 7.50p at 1234 GMT.