Chris Metcalfe, Investment and Managing Director at Metnor, commented:
‘’The synergy of Kingswood and IBOSS gives both parties an exceptional opportunity to enhance their client propositions and range of services. We had several potential suitors, but none realised the intrinsic value of how we manage money and the attraction for advisers that comes with our industry-leading service standards and client communications.
“As part of the Kingswood Group, we will offer our new and existing IBOSS users an exit strategy that will be one of the most attractive in the industry, something that adviser firms have been asking us to facilitate for some years now. We are pleased to be able to deliver precisely what advisers have asked for. For many adviser firms, continuing the investment proposition and not disturbing the client is extremely important.
As we increase our range of investment services, we realised we would need to keep bolstering our team, especially in light of the Sustainable range, which is particularly research-heavy. Kingswood will offer us the ability to build up our investment team with no affect on to the strategy and methodology.’’
Consideration and Funding
Upon receipt of regulatory approval, the consideration payable to the shareholders of Metnor is:
– Initial cash consideration of £9.6 million, paid on closing;
– A maximum of £6.4 million of deferred consideration, payable over a two year period, some of which is subject to the achievement of pre-agreed performance targets; and
– A performance based earn out linked to the three year EBITDA growth for IBOSS Asset Management Limited.
Each part of the Consideration may be paid in cash or, if a selling shareholder of Metnor so elects and Kingswood agrees, in ordinary shares of Kingswood. If the consideration is to be settled in cash, it will be funded from the issue of convertible preference shares, under the terms of its Convertible Preference Share subscription agreement with HSQ INVESTMENT LIMITED, a wholly owned indirect subsidiary of funds managed and/or advised by Pollen Street Capital Limited (“Pollen Street”). Kingswood’s partnership with Pollen Street grows in strength, and to date has provided growth equity of £44.8 million to support existing and future acquisitions.
Grant Thornton and Eversheds Sutherland have supported Kingswood on both due diligence, accounting and legal work, with Simpson Wood Chartered Accountants and Pannone Corporate acting for Metnor.