Listed wealth management firm swoops for financial advisory business
Listed Kingswood Holdings, an integrated wealth management group which trades under the name KW Wealth, has acquired Beverley-based Marchant McKechnie Independent Financial Advisers.
The total maximum consideration payable for the acquisition is £4m and is subject to FCA approval. This consideration comprises an initial cash payment of £1.6m with a deferred sum of up to £2.4m. This is payable in cash or, at the seller’s request and Kingswood’s agreement, Kingswood shares, subject to certain revenue metrics being achieved over the next two years.
For the year to 31 December 2017, Marchant McKechnie generated EBITDA of £855,000, meaning the acquisition has been completed at a valuation of 4.7x 2017 EBITDA. For the same period Marchant McKechnie generated profit after tax of £499,000. The acquisition is expected to be immediately earnings enhancing to the Group.
Based in East Yorkshire, Marchant McKechnie offers a wide range of services to its clients, including personal and company pensions, investments, and tax planning. Marchant McKechnie serves around 700 clients and has about £200m of assets under advice (AUA).
Following the acquisition, the Group will have over £2bn of AUA, 20 financial advisors and more than 4,000 active clients. Marchant McKechnie will continue to operate from its existing office in Beverley and will become KW Wealth’s seventh regional office in the UK, after London, Manchester, Cheltenham, Maidstone, Brighton and Worcester.
The acquisition is part of KW Wealth’s strategy to become a leader in the UK wealth management market and represents the Group’s first acquisition since the rebrand from European Wealth in September 2018.
Marianne Ismail, CEO of KW Wealth said: “Marchant McKechnie is a strong addition to the Group as we look to build a new national brand in the UK wealth market. Marchant McKechnie shares our commitment to delivering high levels of customer service to clients over the long-term.
“The UK wealth market is excessively fragmented, and we believe that there is a substantial market opportunity to build a national brand for quality, independent wealth planning advice and investment management.
“The rebranding of European Wealth to KW Wealth and the acquisition of Marchant McKechnie are first steps. Our objective is to grow both organically and dynamically by acquisition in the UK and US, and we are actively looking at opportunities in both countries. The Group has a strong and scalable operating platform with the capacity to support incremental revenue and earnings growth from future acquisitions, delivering improved profitability for the Group as a whole.”
Neil McKechnie, Founder, Marchant McKechnie,added: “I am delighted that in KW Wealth we have found an owner who shares our philosophy of working in a way that is always centred on what is right for the client. KW Wealth has a strong platform that will enable a number of synergies to be realised through the combination of our businesses and we look forward to playing our part in helping KW Wealth achieve their ambition of becoming one of the leading wealth management providers in the UK market.”
Schofield Sweeney’s Chris Blantern, Partner, and Daniel Bisby, Solicitor, advised Marchant McKechnie on the deal.
