Hardwood Wealth Management Group has acquired Network Direct, a national network of financial adviser firms, for a maximum total consideration of up to £4m.
The consideration of £4m is based on £1m payable at completion and the remainder payable based on the performance of Network Direct over the next five years.
Wolverhampton based Network Direct is being sold by its principal shareholders Willian Wynn, Jenifer Schwartz, Brian Raymond, Richard Simon and Leslie Dennis Lee, and the deal is subject to FCA approval.
Network Direct’s 107 financial advisers work across the UK and has assets under influence of £1bn. It made a loss before tax of £24,000 on a gross revenue of £10.1m for the year ended 31 May, 2015, and net assets were £64,000. Those adviser firms operating with the Network Direct pay a fee depending on the number of advisers within their business.
A statement from Harwood said it would inject around £250,000 of capital into Network Direct to ensure capital adequacy post acquisition. It also said that this was the firm’s most significant acquisition to date and following the completion of the deal, its total assets under influence will increase to £3bn.
Chairman of HWMG Peter Mann said: “We are extremely pleased to be able to announce this key strategic acquisition. We anticipate that the Acquisition will enable us to further leverage our existing investment solutions to the benefit of NDL’s advisers and clients, and also that it will enable us to expand our reach across the UK where there is a growing market for the delivery of quality investment management and advice. We welcome the NDL team and advisers to the group, and look forward to working with them to deliver fully integrated investment solutions to their clients.”
One of the main reasons for the deal said the statement was to focus on revenue synergies from Network Direct’s advisers by leveraging Harwood’s existing investment solutions. Harwood intends to grow the Network Direct business by extending investment and pension advice, management and administration to its clients. Network Direct’s advisers do not currently have access to a dedicated suite of investment products.