Wealth manager increases presence in key market with £2m acquisition

Wealth management group AFH has further expanded its portfolio of IFAs with the acquisition of a firm in Essex in a deal which could be worth more than £2m.

The Bromsgrove-based group has acquired Britton Financial, based in Colchester. Following the acquisition, the former owner of the firm, Ken Kerr, will retire and the clients of Britton will be transferred to existing AFH advisers.

Under the terms of the acquisition, the maximum purchase price for the firm is £2,081,000 based on the ongoing recurring revenue of the firm subject to meeting certain financial targets.

For the financial year ended May 31, 2017 Britton achieved reported pre-tax profit of £352,551. The company estimates that, on a pro forma basis, following the integration of clients to existing AFH advisers, this would have generated a profit before tax of £500,000.

The initial consideration for the acquisition is £1.1m in cash, funded from the company’s existing cash resources. Further deferred consideration will be payable in cash over the next 26 months in two tranches, dependent upon performance criteria of the business acquired.

Commenting, Alan Hudson, chief executive of AFH, said: “This first purchase of an IFA business during the current financial year demonstrates the continued high level of activity that we are seeing in the market.

“The latest acquisition enhances our position in the South East of England and continues our strategy of providing a stable and well capitalised business within which the clients of retiring IFAs can continue to receive appropriate professional advice and investment management.”