Mattioli Woods plc, a specialist wealth management and employee benefits business, has acquired the entire issued share capital of Broughtons Financial Planning Limited from its shareholder for a total consideration of up to £4.0 million.
Founded in 2001, Broughtons provides wealth management advice and administration for 250 individual clients with over £120 million of assets under advice. The firm is based in Oldbury, West Midlands and generated pre-tax profits of £0.62 million on revenues of £0.99 million and its net assets were £0.56 million for the year ended 31 July 2017.
Broughtons' management team will be retained by Mattioli Woods following the acquisition.
The total consideration comprises: an initial consideration of £2.7 million, subject to adjustment for the value of net assets acquired, comprising £2.1 million in cash plus 77,171 new ordinary shares of 1 pence each in Mattioli Woods, valued at £0.60 million based on the closing price of a Mattioli Woods share on 8 August 2018; and deferred consideration of around £1.3 million payable in cash in the two years following completion, subject to certain financial targets being met.
Payment of the initial cash consideration, deal costs and estimated net asset adjustment resulted in a cash outflow at completion of £2.2 million.
An application has been made to AIM for the admission of the consideration shares to trading, which is expected to become effective on 15 August 2018.
Following the issue of the consideration shares, the total number of ordinary shares of 1p each in the firm with voting rights will be 26,276,770, but Mattioli Woods does not hold any ordinary shares.
The sale of consideration shares for two years post completion is restricted by an agreement between the seller and Mattioli Woods and its adviser and broker, Canaccord Genuity Limited.
Founded in 1991, Mattioli Woods has offices in Aberdeen, Buckingham, Glasgow, Leicester, London, Manchester, Newmarket, Preston and Solihull and has over 10,000 clients.