Black Country financial services firm acquired in £4m deal

A Black Country financial services business has been acquired in a £4m deal part-advised in the area.

The deal sees Hardwood Wealth Management Group acquire Essington-based Network Direct, which operates a national network of financial adviser firms.

The £4m deal is based on £1m payable at completion and the remainder payable based on the performance of Network Direct over the next five years.

Network Direct is being sold by its principal shareholders Bill Wynn, Jenifer Schwartz, Brian Raymond, Richard Simon and Leslie Dennis Lee, and the deal is subject to FCA approval.

Network Direct’s 107 financial advisers work across the UK and it has assets under influence of £1bn. It made a loss before tax of £24,000 on a gross revenue of £10.1m for the year ended May 31, 2015, and net assets were £64,000. Those adviser firms operating with the Network Direct pay a fee depending on the number of advisers within their business.

Harwood is to inject around £250,000 of capital into Network Direct to ensure capital adequacy post acquisition. It also said that this was the firm’s most significant acquisition to date and following the completion of the deal, its total assets under influence would increase to £3bn.

One of the main reasons for the deal is to focus on revenue synergies from Network Direct’s advisers by leveraging Harwood’s existing investment solutions.

Harwood intends to grow the Network Direct business by extending investment and pension advice, management and administration to its clients. Network Direct’s advisers do not currently have access to a dedicated suite of investment products.

Philip Round, partner within the Corporate team at Black Country law firm George Green, advised Network Direct on the deal.

Bill Wynn, co-founder of Network Direct, said: “We are delighted to have completed the sale of the business that we have built up over the past seven years.  George Green did a great job for us and we look forward to the continued success of the network as part of the Harwood Group.”

Mr Round said: “We are pleased to have been able to support the shareholders of Network Direct, a longstanding client, throughout the sale process.”