Rathbone Brothers swoops in £150m acquisition of London wealth manager

Liverpool wealth management company Rathbone Brothers has announced the £150m acquisition of Saunderson House, the largest professional services-focused financial planning business in the UK with £4.7bn of funds under management and administration (FUMA).

Rathbones also announced a share placing to raise approximately £50m towards the acquisition.

The deal comprises an initial consideration of £135.1m – £130.2m cash and £4.9m in new shares – and £14.9m deferred consideration.

The initial cash consideration will be funded from a combination of internal cash resources and the proceeds of the placing.

The deferred consideration of £14.9m will be payable on the first anniversary of completion, which is expected to be during the third quarter of 2021. This will comprise £10.9m in cash and £4m to be issued by way of new Rathbones shares.

London-based Saunderson House serves approximately 2,200 high net worth clients with an average portfolio size of £2.2m and typically complex financial affairs.

Rathbones says the deal further strengthens its financial planning capability, enhancing its ability to offer a wider wealth proposition to high net worth and ultra high net worth clients.

It offers a strong cultural fit, with both businesses resolutely focused on delivering a quality service and positive outcomes for clients over the long term.

It also reinforces Rathbones’ UK wealth management industry standing, increasing pro forma FUMA to approximately £61bn.

Rathbones has agreed to pay up to £7.5m in employee incentive plan awards aligned to the value creation of the transaction by the end of 2024.

Paul Stockton, Rathbones chief executive, said: “Saunderson House is a high quality business with a strong desire to deliver leading wealth management services to clients over the long term, and it will add both scale and capability to Rathbones.

“Commonly shared values and a resolute focus on delivering quality client outcomes provide a firm foundation from which to take advantage of some exciting growth opportunities.

“I very much look forward to welcoming everyone at Saunderson House to the Rathbones group as we work to exceed our ambitions together.”

Tony Overy, chief executive of Saunderson House, said: “Over the course of extensive recent engagement between Saunderson House and Rathbones, it has become clear to us that there is a high level of cultural alignment between our two businesses – both have been built on serving clients to the highest standards and building enduring relationships based on trust and integrity.

“By doing this over many years we have each built a high quality business with very loyal and satisfied clients.

“I am absolutely delighted with our decision to partner with Rathbones which I believe will allow us to continue doing exactly this, with access to Rathbones’ significant additional investment management capability and market leading investment process.

“This transaction provides long term ownership stability for Saunderson House to enable us to continue to focus on providing our high level of client service, developing and enhancing our proposition, and providing an excellent environment for our people as part of a well respected and well capitalised group.”