Thu, 16 Jun 2022 | BUSINESS SALE
Acquisitive wealth management group Kingswood Holdings has completed its latest acquisition with the takeover of Lincolnshire independent financial advisory (IFA) Vincent & Co. The agreement to acquire Vincent & Co was announced in May, with the deal now completing for a total consideration of up to £421,000.
When the deal was announced, Kingswood said £211k was to be paid upon completion, with the remainder paid on a deferred basis. The total consideration would represent around a 5x multiple of Vincent & Co’s pre-tax profits of £83,000 for the year ending October 31 2021, generated on revenues of around £135,000.
Vincent & Co provides financial advice services for more than 130 clients across Lincolnshire, bringing with it £25 million in assets under administration (AuA). Following the deal, Kingswood says it now has approximately £7 billion in assets under advice or management.
Announcing the deal in May, Kingswood UK CEO David Lawrence said: “I’m delighted to announce the acquisition of Vincent & Co, our fifth acquisition this year. Vincent & Co have been established for over 20 years and have built deep relationships with their clients and an ethos which matches ours at Kingswood. This is a great opportunity to make an acquisition that consolidates our presence in Lincolnshire.”
The acquisition will be funded through cash reserves made available to Kingswood from the issue of new convertible preference shares, issued under the terms of the group’s agreement with HSQ Investment Ltd, a subsidiary of Pollen Street Capital Ltd.
Pollen Street’s funding has helped drive Kingswood’s rapid acquisitive growth over recent years, with the firm having so far provided £77.4 million in growth equity for the company's acquisitions and future deals.
Speaking in May, David Lawrence said: “During 2022 we will continue to focus on our acquisition activity. We have a strong pipeline of activity, with four potential acquisitions in exclusive due diligence. Our near-term target is to build our UK AUA/M in excess of £10bn in the U.K. and £14bn globally.”
Following the completion of the Vincent & Co deal, Kingswood says it now has eight potential acquisitions in its pipeline at an exclusive due diligence stage.
Kingswood’s acquisition drive has come during a period of exceptionally strong M&A activity in the UK’s wealth management sector. This dealmaking appears set to continue, potentially over the long term, driven by factors including widespread fragmentation, an ageing population of owners, rising sale multiples and the scaled-up acquisitive activity of private equity buyers and industry consolidators such as Kingswood.
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This established IFA is assigned to one major platform ensuring a very smooth transition of client assets.
This is a highly profitable business with EBIT percentage of 33%, meaning money can be recouped quickly after a purchase.
With advisers and back-office staff in place, this business can be purchased and will keep running efficiently.
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