Mattioli Woods acquiring wealth management firm Montagu

(Sharecast News) - Wealth management and employee benefits company Mattioli Woods announced the acquisition of Montagu from its shareholder on Wednesday, for total consideration of up to £2.34m on a cash-free, debt-free basis.
The AIM-traded firm said Montagu, established in 1996, provides wealth management advice and administration for more than 150 private and corporate clients, with about £80m of assets under advice.

Montagu is based in Twickenham, and employs an experienced team of four staff, all of whom would remain with Mattioli Woods following completion.

The board said that, like Mattioli Woods, Montagu specialises in the provision of fee-based financial planning advice.

It said the complementary product offerings would provide scope for potential revenue synergies, while maintaining the "strong cultural commitment" of both companies to putting clients first.

In the year ended 31 July, Montagu generated revenues of £0.77m with a profit before tax of £0.31m.

As at 31 July, its gross assets totalled £1.05m with net assets standing at £0.95m, including £0.91m of cash.

The acquisition was expected to be earnings enhancing in the first full year of ownership.

Mattioli Woods said the total consideration comprised an initial cash consideration of £1.39m, subject to adjustment for the value of net assets acquired, compromising £1.09m in cash and 40,161 new shares in Mattioli Woods.

Contingent consideration of up to £0.95m would be payable in cash on the first and second anniversaries of completion, subject to certain revenue targets being met.

Payment of the initial cash consideration, deal costs and estimated net asset completion adjustment had resulted in a net cash outflow at completion of £1.19m, net of estimated cash received on acquisition, the board said.

The seller had entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity, restricting sales of the consideration shares during the two years following completion.

"Our discussions have confirmed the strong cultural fit and our common approach to looking after clients, and we are very pleased that Chris and his team are joining Mattioli Woods," said chief executive officer Ian Mattioli.

"The transaction expands our existing operations in London and the South East.

"We believe the range of products and services that Mattioli Woods has to offer can support the excellent outcomes from which Montagu's clients already benefit, whilst offering the potential to realise real revenue synergies by combining our operations."

At 0922 GMT, shares in Mattioli Woods were down 1.01% at 737.5p.