James Hay has agreed to purchase the entire issued and to be issued share capital of rival UK-based adviser platform provider Nucleus in a deal worth around £144.62m.

The merger of the two businesses will create a financial planning and retirement-focused adviser platform in the UK with £45bn of AUA. The offer values each Nucleus share at 188 pence.

The deal leverages James Hay’s know-how in SIPPs and retirement with Nucleus’ expertise as an adviser-led, financial planning and investment platform.

Set up in 1979, James Hay is as a specialist platform for retirement wealth planning.

In 2019, private equity firm Epiris agreed to acquire the entire share capital of financial services firm IFG Group, which is the parent of wealth manager Saunderson House and James Hay.

Currently, the James Hay Group oversees pension and savings assets of £27.9bn for more than 59,000 clients.

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In comparison, Nucleus is a newer company founded in 2006. The firm currently has AUA of £17.4bn on behalf of over 101,000 customers.

Nucleus chairman Angus Samuels said: “The offer reflects the quality of the business and represents an opportunity for shareholders to exit their holding in cash at a significant premium to the pre-offer share price.

“Going forward, the Board believes that in joining with James Hay, Nucleus will be part of a combined group that will have the scale and resources to support its continued growth against the backdrop of a highly competitive marketplace.”

The board of Nucleus has recommended its shareholders vote in favour of the transaction.

Sanlam, which owns a controlling stake of around 52.19% in Nucleus, has backed the deal.

There will be no immediately changes for advisers of the two firms. Nucleus, presently powered by Bravura technology, will eventually move to the platf0rm of FNZ, with which James Hay has a strategic alliance.

The move is said to be made in a “measured and controlled way” to support continuity for customers.

As part of the deal, a “material number” of Nucleus staff, mainly within the technology and platform operations functions, will join FNZ.

The deal awaits shareholder and regulatory approvals. It is anticipated to be finalised in the second quarter of this year.

James Hay Group CEO Richard Rowney welcomed the deal, saying that the two firms have complementary areas of expertise.

Rowney noted: “By joining forces, we can combine Nucleus’ reputation for great digital user-experience and James Hay’s pension specialism, creating greater strength and a platform with the scale to invest and deliver real value for advisers and their clients.”

Last year, Nucleus Financial Group acquired certain assets of OpenWealth in order to have more control over its processes and product development.

OpenWealth is the trading name of Genpact Wealth Management UK.