Kingswood H. Regulatory News (KWG)

European Wealth Group Limited

("European Wealth" or the "Company")

Proposed acquisition, proposed financing and proposed change of name

European Wealth Group Limited (AIM: EWG, EWGL), the integrated wealth management group, announces that it has today agreed detailed heads of terms (the "Heads of Terms") to acquire the entire issued share capital of KPI US Holdco Inc ("KPI US") (the "Acquisition"). Subject to entering into a final Acquisition agreement, completion of the Acquisition will be conditional on, inter alia, KPI US having in turn become the 100% owner of Newbridge Securities Corporation and Newbridge Financial Services Group, Inc, (together "Newbridge") (the "Newbridge Acquisition"), a US based national broker-dealer and registered investment adviser platform.

KPI US is owned and controlled by KPI (Nominees) Limited ("Kingswood"). Kingswood is a related party of the Company for the purposes of the AIM Rules by virtue of being a 39.99% shareholder in European Wealth.

Subject to the entry into of the Acquisition agreement, the Company will fund the initial consideration of US$14.6m (the "Initial Consideration") payable by KPI US in connection with the Newbridge Acquisition using the proceeds of a convertible loan from Kingswood (further details of which are set out below). US$2.0 million of the Initial Consideration will be held in escrow to cover any potential warranty claims, for phased release from escrow over a period of three years from the completion of the Newbridge Acquisition. The Acquisition and the Newbridge Acquisition would complete simultaneously. The Company has also agreed to reimburse KPI US for its expenses incurred in relation to the Newbridge Acquisition. In addition there is expected to be an element of deferred consideration payable by the Company to Kingswood in connection with the Acquisition depending on the future performance of the Newbridge business over a five year period from the completion of the Acquisition.

The Acquisition will be subject to regulatory approval from the Financial Industry Regulatory Authority ("FINRA"), the applicable regulatory authority in the US, and the Acquisition is expected to close in late 2017 or early 2018.

Newbridge

Newbridge is a US based national broker dealer platform headquartered in Florida. Newbridge has a nationwide network of over 220 professional advisors and associated broker-dealers, over 12,000 clients and approximately US$1.7 billion Assets Under Management ("AUM"). The business has a strong national footprint, with representatives in 46 offices across the US, including a strong presence in key financial centers such as New York.

In the year ended 31 December 2016, Newbridge reported full year revenue of US$28.0m and profit before tax of US$(0.5)m. As at 31 December 2016, Newbridge had net cash of US$0.7m and total gross assets of US$2.5m. Newbridge has actively grown adviser personnel over the last 12 months and the resultant revenue growth, coupled with cost eliminations that will be derived under the Company's ownership model, should deliver significant benefits to European Wealth post-closing.

Following the successful completion of the Acquisition the Company will have approximately 20,000 clients and in excess of US$4 billion AUM. The board believes that following completion of the Acquisition the enlarged platform will benefit from significant operational synergies, leveraging its global distribution power to retail and institutional investors while providing regulatory efficiencies across the Group. It will benefit from economies of scale through integrated product development and technical support.

Proposed financing

Under the Heads of Terms, the Company proposes to fund the Initial Consideration and the costs of the Acquisition by entering into a convertible loan in the sum of US$17.6 million with Kingswood (the "Convertible Loan"). Kingswood will also be providing two revolving working capital facilities to the Company - one (in the sum of US$2.0 million) to be used exclusively for the Newbridge business post Acquisition and the other (in the sum of £2.0 million) exclusively for the Company's UK business.

The terms of the Convertible Loan are proposed to be as follows:

· Total quantum US$17.6 million

· Interest rate of 7.5% per annum from the date of drawdown

· Repayable 3 years from the date of approval from FINRA for the Acquisition

· The Company can repay the Convertible Loan in whole or in part at any time without penalty

· The Convertible Loan is convertible by either the Company or by Kingswood subject to shareholder approval of the necessary authorities for the issue of new shares and subject to any other applicable regulatory approvals

· The conversion price will be the lower of 16.5 pence, being the mid-market close price on the last business day before this announcement, and the average mid-market closing price of a European Wealth share for the 20 business days prior to the applicable notice of conversion being given

· If the Acquisition does not complete, then any amount of the Convertible Loan that has been drawn down will be repaid without interest

The Company will also be exploring with Kingswood the possibility of offering participation in the Convertible Loan to other shareholders in the Company who express an interest in participating.

The Company will now focus on moving as quickly as possible from the Heads of Terms (which, although finalised, are not legally binding) to agreeing binding legal documentation with Kingswood (to cover both the Acquisition and the Convertible Loan) and to finalising the applicable application to FINRA.

Proposed change of name

The Board believes that, given the proposed changes to European Wealth's group structure, this is an appropriate time to change the Company's name. Subject to shareholder approval, the Board is proposing to change the Company's name to Kingswood Limited, under which every activity of the Company will be branded.

Further announcements regarding each of the Acquisition, the Company's financing and the proposed name change will be made in due course, as appropriate, including for the related party procedures pursuant to Rule 13 of the AIM Rules once final documentation has been agreed.

Commenting on the proposed Acquisition, CEO of European Wealth, Marianne Ismail, said:

"We are ambitious to grow organically and energetically by acquisition. This is our first key step to deliver a profitable and differentiated strategy in the financial services arena.

"Newbridge presents a unique opportunity to invest in an established, well-positioned company that significantly increases our global footprint by gaining immediate access to the largest wealth management market in the world. We are confident that the proposed acquisition will allow us to accelerate our growth path towards our stated ambition of becoming a global vertically integrated financial services platform.

"It will empower us to benefit from increased scale, enhance our product proposition and leverage operational efficiencies to attract more clients, and significantly increase our AUM."

Commenting on the proposed Acquisition both Leonard Sokolow, Chairman of Newbridge, and Thomas Casolaro, CEO of Newbridge, stated:

"We believe that the proposed combination of our two businesses represents an exciting opportunity to grow a truly global business focused on delivering innovative products to our clients. European Wealth benefits from supportive shareholders, and with their backing, we can aim to rapidly build our product offering and global footprint, and ultimately, enhance our returns to shareholders."

For further details, please contact: