Tavistock Investments, UK-based financial services group, has agreed to acquire IFA Abacus Associates Financial Services for £5.165m.
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Abacus is a directly authorised Hereford-based firm that has 45 self-employed advisors covering the North East, Midlands and South West of England.
Following the acquisition, Abacus will become a wholly owned subsidiary of Tavistock Group from 1 April 2016.
Additionally, Tavistock will retain the Abacus brand, while Abacus’ founder and managing director Malcolm Harper will continue to lead the business, as well as take on wider responsibility as part of the group’s senior management team.
Under the terms of the deal, Tavistock will pay an initial fee of £4.2m, consisting of £2.5m in cash, and a £130,000 loan agreement. The remaining £1.5 million will be settled by issuing 20 million new ordinary shares in the company to Abacus shareholders at an issue price of 7.5p per share.
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By GlobalDataThe transaction has already received approval from the Financial Conduct Authority (FCA).
Abacus has recorded pre-tax profits of £781,000 on turnover of £4.5m. The company also reported net assets of £1.59m, which included £1.23m in cash.
The company’s assets under influence are estimated to exceed £650m, of which some £250m are managed directly on an advisory basis.
Harper said: "The transaction has also ensured the potential for a retirement exit for each of our advisers at a time that suits them. I will remain as a significant stakeholder in the enlarged Group and am looking forward to working with the Tavistock team."
Tavistock CEO Brian Raven said: "This transaction also signals a significant milestone for Tavistock as we move into healthy profitability at Group level. Less than two years after completing our initial transaction, we are established as a national brand with over 300 advisers, FUA approaching £4 billion and FUM of £425 million – £250 million in advisory models and £175 million in discretionary portfolios."
