AFH hits the acquisition trail with near £3m deal

WORCESTERSHIRE IFA AFH has once again been on the acquisition trail, this time acquiring a Devon firm in a deal worth almost £3m.

Davisons Financial Management is the financial planning division of Davisons Chartered Accountants, a rapidly expanding practice in Devon. It will continue as a trading style of AFH. The DCA accountancy practice will continue to act as an introducer. The advisers of DFM joined will also join AFH on completion.

Under the terms of the deal, the maximum consideration payable by AFH will be £2,856,000 based on the profitability of DFM over the next 24 months.
 
The deal will be funded through a combination of cash and the issue of new ordinary shares in AFH over a 24 month earn out period. The initial payment of £1,071,000 has been funded from the company’s existing cash resources, together with the issue of 71,915 consideration shares at a price of 146p.

A deferred consideration of up to £1.68m will be payable, of which no more than £945,000 will be settled in cash with the balance met through the shares issue.
 
The acquisition is the 13th by AFH since the company listed on AIM in June 2014.
Commenting on the deal, Alan Hudson, chief executive of AFH, said: “I am pleased to welcome current managing director of DFM, John Wright and his team to AFH and look forward to developing the existing relationship with DCA to drive the expansion of AFH in the South West region.

“The structure of this deal, which enables the vendors to participate in any future uplift in revenue and profitability through the issue of the consideration shares and will be held for a minimum period of three years, reflects their belief that the sector has significant potential and that our business model is value enhancing.”