Mattioli Woods is to buy Boyd Coughlan for up to £7m.
The specialist wealth management and employee benefits business also announced plans to raise up to £18.6m by way of a Firm Placing of up to 2m new Ordinary Shares and a Conditional Placing of up to 1.8m new Ordinary Shares at an issue price of 490 pence per share.
Buckingham-based Boyd Coughlan is an employee benefits and wealth management business and the management team is being kept on. Mattioli Woods expect the deal to be earnings enhancing in first full year of ownership. The £7m cost is subject to adjustment for value of net assets acquired and will be satisfied in cash and shares.
Boyd Coughlan provides advice to both corporate and personal clients and, said Mattioli Woods in their official Stock Exchange announcement, generates strong margins and recurring revenues, with over £160 million of assets under advice.
The statement read: “The Acquisition provides the Group with a wider audience for its products and services, and extends the Group’s employee benefits proposition, at the time when the drive towards total reward and flexible benefits is expected to create new business opportunities in the corporate market.”
As for the use of the money raised from the proposed Placing, the statement said: “The proposed acquisition of Boyd Coughlan illustrates Mattioli Woods’ ability to identify earnings-enhancing acquisition opportunities to grow its business. As a result of this transaction, the current amount of surplus capital (that is, prior to the Placing) allocated by the Company for acquisitions is expected to be utilised. The Placing will therefore provide the Company with the flexibility to take advantage of further acquisition opportunities, of which another has been identified…”
As regards current trading, the company said: “The Board is pleased to report another year of growth, in line with its expectations. The Group’s total client assets under management, administration and advice had increased by 17% to £5.4 billion at 31 May 2014, of which discretionary assets under management accounted for over £1 billion.
“The Company has seen strong growth in its core pension and wealth management business, with the Government’s new pension freedoms creating additional stimulus both now and looking ahead. This growth has more than offset the anticipated falls in banking income, due to new banking rules on liquidity cover further reducing the margins available, and employee benefit revenues, as the corporate pensions market transitions to a fee-based proposition prior to the abolition of provider commissions in April 2016.”
CEO of Mattioli Woods Ian Mattioli Woods said: “I am delighted with the performance of our business in what has remained a rapidly-changing market. The Government’s pension reforms have repositioned pensions at the forefront of financial planning, which together with the continued development of our consultancy team has driven strong growth in wealth management.
“Boyd Coughlan is an excellent strategic fit, offering real synergies with the wider Group. The acquisition gives us the ability to offer our pension, property and investment products to Boyd Coughlan’s clients and to offer enhanced employee benefits services to Mattioli Woods’ clients, strengthening our market position.
“It is our ambition to continue expanding Mattioli Woods’ operations both organically and by acquisition. All our acquisitions completed to date have been earnings enhancing and have broadened or deepened the Group’s expertise and services. Raising capital now will give us the flexibility to pursue both existing and new acquisition opportunities as they arise.”