Thu, 24 Jun 2021 | BUSINESS SALE
Rathbone Brothers has struck a deal to acquire financial advice firm Saunderson House for £150 million. The acquisition is around a 4.3x multiple of the firm’s most recently reported turnover of £34.6 million and around 34x its most recent post-tax profits of close to £4.4 million.
The deal will see Rathbones acquire 100 per cent of the issued share capital of Saunderson House’s holding company CastleCo Limited for an initial cash and share consideration of £135 million. A deferred £14.9 million cash and share consideration will be payable upon the first anniversary of the completion of the deal. The takeover remains subject to regulatory approval and is expected to close in Q3 2021.
According to Rathbones, the acquisition will make it the UK’s third-largest wealth manager. Saunderson House brings with it £4.7 billion in assets under management (AUM), bringing Rathbones total AUM to £61 billion.
The acquisition also adds 2,200 clients, with an average portfolio size of around £2.2 million, and 55 financial advisers, bringing Rathbones’ in-house financial planners to 80. The deal also increases Rathbones’ financial planning assets from £3.7 billion to £8.3 billion.
Commenting on the deal, Rathbones CEO Paul Stockton said: "Saunderson House is a high-quality business with a strong desire to deliver leading wealth management services to clients over the long term, and it will add both scale and capability to Rathbones.”
"Commonly shared values and a resolute focus on delivering quality client outcomes provide a firm foundation from which to take advantage of some exciting growth opportunities. I very much look forward to welcoming everyone at Saunderson House to the Rathbones group as we work to exceed our ambitions together."
Saunderson House CEO Tony Overy added: "This transaction provides long-term ownership stability for Saunderson House to enable us to continue to focus on providing our high level of client service, developing and enhancing our proposition, and providing an excellent environment for our people as part of a well-respected and well-capitalised group."
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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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