AFH makes its largest acquisition to date

BROMSGROVE financial service plc AFH has bought a Gloucestershire IFA firm for up to £4.1m – its largest acquisition to date.

It is acquiring Stroud-based Independent Financial Services (IFS) a national firm of IFAs.
 
IFS is AFH’s tenth acquisition since its June 2014 AIM listing and takes the firms’s total funds under management (FUM) to approximately £1.7 bn.

IFS has 35 independent financial advisers and numerous national affinity group relationships.  
 
For the year ended 28 February 2015, IFS’s revenue amounted to £3.09m, of which £2.6m was recurring, and profit before tax amounted to £0.23m. The net assets of IFS as at 28 February 2015 were £0.24m.
 
Under the terms of the acquisition, the maximum payable by AFH is £4.1m based on the performance of IFS over the next 30 months and it is estimated that a further £500,000 of restructuring and integration costs will be incurred by AFH in the current financial year.
 
The acquisition is to be paid for through a combination of cash and the issue of new ordinary shares in AFH over the 30 month earn out period.
 
Alan Hudson, chief executive of AFH, said: “Today’s acquisition signifies another key milestone as both our largest to date and our first of a national firm, taking our total estimated FUM to £1.7bn.
 
“Independent Financial Services represents a significant paper-based transaction with protection for existing investors against excessive dilution and provides excellent geographical synergy to the company’s current advisers.”