Mattioli Woods plc Acquisition of Atkinson Bolton
Mattioli Woods plc (AIM: MTW.L), the specialist pensions consultancy and wealth management business, is pleased to announce the acquisition of the entire share capital of Thoroughbred Wealth Management Limited ("TWM") and its subsidiary Atkinson Bolton Consulting Limited ("ABC") (together "Atkinson Bolton") from its shareholders ("the Sellers").
The total consideration of up to £5.99 million is to be satisfied partly in cash and partly through the issue of 946,256 new ordinary shares of 1p each in Mattioli Woods. The cash consideration is payable in part on completion and in part over the period of four years following completion, subject to certain earnings targets being met. The initial cash consideration is being funded from the Group's existing resources, which net of deal costs and including estimated cash acquired in Atkinson Bolton results in an estimated cash inflow at completion of £0.88 million.
TWM is the holding company of ABC, an employee benefits and wealth management business founded in 2001 with the objective of providing clients with bespoke financial services. Based in Newmarket, ABC employs 50 staff providing advice to both high net worth individuals and companies on all aspects of financial planning. In addition, ABC offers a full discretionary management service and operates its own Open Ended Investment Company, The IM Thoroughbred Funds ICVC. ABC has total funds under management and advice of circa £420 million. ABC's experienced management team will be retained by Mattioli Woods following the acquisition, which is expected to be earnings enhancing in the first full year of ownership.
In the year ended 31 December 2012, TWM generated a profit after taxation and before shareholders' dividends of £0.61 million on revenues of £2.88 million. At 31 December 2012, TWM's consolidated net assets were £1.77 million (including net assets of ABC of £0.98 million).
The acquisition enhances Mattioli Woods existing employee benefits proposition at a time when the introduction of the National Employment Savings Trust ("NEST") and auto-enrolment present clear opportunities. In addition, the acquisition offers the enlarged Group the opportunity to extend the provision of SIPPs to a wider audience and adds further specialist wealth management expertise to Mattioli Woods' existing operations.
The total consideration consists of an initial consideration of £3.24 million (subject to adjustment for the value of net assets acquired), comprising £375,000 in cash and 946,256 ordinary shares in Mattioli Woods ("the Consideration Shares", which are valued at £2.87 million based on the closing price of a Mattioli Woods share on 26 July 2013), plus deferred consideration of up to £2.75 million payable in cash in the four years following completion if certain financial targets are met based on growth in earnings before interest, tax, depreciation and amortisation generated during that period. Application for admission to AIM of these 946,256 new ordinary shares ("Admission") has therefore been made and it is anticipated that such Admission will occur on 2 August at 7.00 a.m.
The Sellers have entered into a lock-in deed with Mattioli Woods and its nominated adviser and broker, Canaccord Genuity Limited, restricting sales of the Consideration Shares during the four years following completion.
Commenting on the acquisition, Ian Mattioli, Chief Executive of Mattioli Woods, said:
"The acquisition of Atkinson Bolton is an excellent cultural and strategic fit, offering real synergies with the wider Mattioli Woods Group. This is another exciting step forward in our development as a broader wealth management business and offers us the ability to provide additional value-added services to clients of both firms."
James Bolton, Managing Director of Atkinson Bolton, commented:
"We are proud of the business we have built over the last twelve years and excited about joining the Mattioli Woods Group. We look forward to continuing to develop Atkinson Bolton as an integral part of the Group for the benefit of clients, employees and shareholders. With the added benefits of scale, more locations and breadth of service, we can enhance delivery across each of our corporate employee benefit, wealth management and investment propositions."