AFH grows acquisition war chest after successful share placing

WORCESTERSHIRE wealth management group, AFH, is to continue on the acquisition trail after a successful shares issue.

The Bromsgrove-based group has raised £750,000, before expenses, through the placing of 535,716 new ordinary shares. It has pledged that the net proceeds of the placing will be used to continue its” acquisition-led growth strategy” and for general working capital purposes.

The price of the placing represents a discount of approximately 3.4% on the closing price of AFH’s shares on the Alternative Investment Market (AIM) pm May 25. Following admission to AIM, the shares will represent approximately 2.7% of the company’s total share capital.

The placing also follows on from the company’s acquisition of Independent Financial Services (UK) Ltd, which completed on April 30, 2015. IFS is a national firm of IFAs based in Stroud and at £4.1m is the largest acquisition made by the company to date.

The acquisition of IFA brings an additional 35 independent financial advisers to the AFH group, as well as numerous national affinity group relationships.

Following the acquisition, AFH now has around £1.7bn of funds under management.

As a result of the size of the acquisition and regulatory requirements, IFS is not being immediately integrated into AFH’s existing infrastructure and will be operated as a separate entity for the remainder of the financial year ending October 31, 2015.

AFH has said it will therefore incur the existing cost base of IFS during the remainder of the current financial year. The group’s board said it was also expecting to incur one-off restructuring and integration costs of around £0.5m in relation to the acquisition.

The company said it remained cash generative at the operating level and would have £4.75m in cash following the new placing.