£20m war chest gives financial services firm acquisition firepower
Bromsgrove financial services group AFH is to raise £20m through a share placing to help fund its ongoing acquisition drive.
Cash from the placing of convertible unsecured loan stock, subject to shareholder approval, will be used to execute the company’s acquisition pipeline and for general corporate purposes.
AFH said it has a strong pipeline of potential acquisitions under consideration and due diligence.
“Alongside its strategy to drive organic growth, the board intends to continue to execute its strategy of making selective acquisitions within the financial planning and wealth management sector whilst providing a professional and cost-effective service to its clients,” the company said.
“The board believes that the company remains well positioned to take advantage of consolidation opportunities in the sector and currently has a strong near-term pipeline, with five potential acquisitions currently at various stages of the due diligence process. The company is undertaking the placing to provide it with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes. The company is also currently exploring options to access additional capital, including the use of bank debt, to enhance its ability to undertake value-adding acquisitions and for general corporate purposes.”
AFH saw revenues rise 61% in the first half of 2019 as it continues to reap the rewards of its aggressive acquisition strategy, making four acquisitions in the period, and spending £16m acquiring 16 businesses in 2018.
For the six months to the end of April, revenues rose to £36.6m from £22.7m in the prior year period, while underlying EBITDA up 74% to £7.7m.
Profit after tax was up 80% to £4.5m as the company saw funds under management rise 68% to £5.4bn.
