Tavistock Investments is to acquire Abacus Associates for £5.165m.
Tavistock, which is an integrated financial services company, will complete the acquisition of Abacus, an independent financial advisory business headquartered in Hereford, on 1 April.
Abacus, which consists of 45 mainly self-employed financial advisers covering the North East, the Midlands and the South West, will become a wholly owned subsidiary of Tavistock. The brand will remain active within Tavistock.
The consideration is made up of £4.165 million at completion, of which £2.535 million is to be settled in cash and £0.13 million through the adoption of a debt obligation. The balance of £1.5 million will come from the issue to Abacus of 20,000,000 new ordinary shares of 1p each in the capital of Tavistock at an issue price of 7.5p per share. A further £1 million is to be settled in cash on the first anniversary of completion. As a further part of the deal, Abacus is also entitled to potentially receive a performance-related deferred consideration, payable in cash in July 2018, subject also to certain other conditions relating to quality of service and customer satisfaction.
The deal is being financed through Tavistock’s existing resources, together with the proceeds of a share subscription and a new debt facility.
Abacus Founder and Managing Director Malcolm Harper (who will continue to head-up the business) said: “I’ve been searching for the right partner to help me take Abacus to the next level, and Tavistock impressed me as the best option. They provide a range of discretionary investment solutions that will suit many of our clients and share our ethos for transparency and quality of customer care. The transaction has also ensured the potential for a retirement exit for each of our advisers at a time that suits them. I will remain as a significant stakeholder in the enlarged Group and am looking forward to working with the Tavistock team.”
Brian Raven, Tavistock’s Chief Executive, commented: “We are delighted that Abacus has become part of the Tavistock Investments Group. Tavistock is extremely selective when it comes to identifying businesses with which it would like to partner, and this agreement is testament to the strength and quality of Abacus, which is an ideal cultural fit. This transaction also signals a significant milestone for Tavistock as we move into healthy profitability at Group level. Less than 2 years after completing our initial transaction, we are established as a national brand with over 300 advisers, FUA approaching £4 billion and FUM of £425 million – £250 million in advisory models and £175 million in discretionary portfolios.”