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November 24, 2020

Kingswood finalises majority stake purchase in MHC as part of US push

Kingswood Group has ramped up its US expansion strategy by wrapping up the deal to acquire a 50.1% controlling stake in Manhattan Harbor Capital (MHC).

In May this year, Kingswood completed the acquisition of wealth manager Chalice and also inked conditional heads of terms to take a majority stake in MHC.

The agreement involves Kingswood acquiring Chalice Capital Partners as well as Chalice Wealth Advisors and folding Chalice into MHC.

In an update, Kingswood now unveiled that the formal contribution of Chalice into MHC at a value of $4m along with an additional cash equity investment of $1.1m has been concluded.

MHC has now been renamed as Kingswood US, with key hubs in Atlanta, New York and San Diego.

Mike Nessim will spearhead the US operation as managing partner and will be in charge of a team comprising 184 authorised representatives.

Nessim stated: “This partnership with Kingswood has enormous potential, and we now have the backing to deliver the next phase of our ambitious business plan.

“The capital, team, infrastructure and technology is now in place to execute our ambitious US organic growth strategy.”

On a pro-forma basis, MHC and Chalice together generated revenue of $29.6m in the twelve months to 31 October 2020.

Kingswood intends to hold a stake of around 68% of the integrated US financial services platform using additional growth equity investment of up to $8m by 31 December 2022.

Kingswood US has also secured an unsecured convertible revolving promissory note at a 15% interest rate.

The group said that this would offer financing of up to $1m until 31 December 2022 that may be repaid or converted to equity at Kingswood’s option and counts towards the $8m investment.

Kingswood group CEO Gary Wilder said: “This investment is a major statement of intent regarding our US expansion plans and puts us in a strong position to deliver our US strategy.

“Mike and his team are highly talented, best in class operators in the IBD, RIA space and combined with Derek Bruton, who joined our US business with the Chalice acquisition, we now have exceptionally talented and experienced industry leaders to deliver a successful US strategy.”

 

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