TIDMKWG
RNS Number : 0933G
Kingswood Holdings Limited
23 November 2020
KINGSWOOD HOLDINGS LIMITED
("Kingswood", the "Company" or the "Group")
Kingswood announces completion of acquisition of 50.1% interest
in Manhattan Harbor Capital
Another major milestone achieved in Kingswood's US expansion
strategy
Manhattan Harbor Capital now renamed Kingswood US
Further to its previous announcement of 12 August 2020,
Kingswood Holdings Limited (AIM: KWG) announces the completion of
the formal contribution of its US investments Chalice Capital
Partners and Chalice Wealth Advisors (together "Chalice") into
Manhattan Harbor Capital ("MHC") at a value of $4 million (GBP3.1
million) for additional equity, which combined with an additional
cash equity investment of $1.1 million (GBP0.9 million) increases
Kingswood's interest in MHC to a majority and controlling 50.1%
position.
MHC has now been rebranded Kingswood US and provides the Group
with a strong, robust and well-capitalised foundation to accelerate
its US organic growth strategy.
The Company intends to contribute up to $8.0 million (GBP6.1
million) of additional growth equity before 31 December 2022 to
further build US distribution channels through active adviser
recruitment. If all capital is approved and fully deployed, the
Kingswood Group is projected to own approximately 68% of the
integrated Kingswood US financial services platform.
The Company has extended to Kingswood US an unsecured
convertible revolving promissory note at an interest rate of 15%
which provides funding of up to $1 million (GBP0.8 million) until
31 December 2022, which may be repaid or converted to equity at
Kingswood's option and which counts towards the $8 million (GBP6.1
million) growth equity referred to above.
Kingswood US now comprises strong Independent Broker Dealer
("IBD") and Registered Investment Adviser ("RIA") businesses across
the US with key hubs in Atlanta, New York and San Diego. In
addition it incorporates Kingwood Capital Markets, a national
Investment Banking platform now supported by significant regulatory
capital to leverage our expanding distribution channels and drive
growth across equity and debt advisory, capital raising and
M&A.
Mike Nessim continues as the Managing Partner of the enlarged
Kingswood US business and leads a team of 184 Authorised
Representatives managing $1,794 million of client investments from
key offices in New York, Atlanta and San Diego.
On a pro-forma, unaudited basis, in the twelve months to 31
October 2020 a combined MHC and Chalice delivered revenue of $29.6
million (GBP22.7 million) and EBITDA of $2.6 million (GBP2 million)
on a fully consolidated basis.
To finance the additional equity contribution and related
acquisition expenses, the Company has issued a total of 928,400 new
convertible preference shares (the "New Convertible Preference
Shares"), under the terms of its convertible preference share
subscription agreement with HSQ INVESTMENT LIMITED, a wholly owned
indirect subsidiary of funds managed and/or advised by Pollen
Street Capital Limited ("Pollen Street").
The New Convertible Preference Shares represent the ninth
tranche of irredeemable convertible preference shares issued
pursuant to the subscription agreement and as such the total number
of irredeemable Convertible Preference Shares held by Pollen Street
has increased to 24,828,443 shares at an issue price of GBP1
each.
Gary Wilder, Group CEO at Kingswood commented: "We are thrilled
to have now achieved a majority interest in the re-named Kingswood
US. I have no doubt the capital we deploy will drive exceptional
growth across the Kingswood US platform.
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".
Mike Nessim, Managing Partner of Kingswood US added: "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. I am
excited to drive this next stage of our growth journey."
For further details, please contact:
Kingswood Holdings Limited
Gary Wilder / Patrick Goulding
+44 (0)20 7293 0730
www.kingswood-group.com
Peel Hunt LLP (Nomad and Broker)
James Britton / Rishi Shah
+44 (0)20 7418 8900
Greentarget (for Kingswood media)
Jamie Brownlee / Alice Gasson / Ellie Basle
+44 (0)20 7324 5498
Eleonore.Basle@greentarget.co.uk
Stand Agency (for Pollen Street media)
Cait Dacey
+44 (0) 7973 596 503
pollenstreet@standagency.com
About Kingswood
Kingswood Holdings Limited (trading as Kingswood) is an
AIM-listed (AIM: KWG) international fully integrated wealth
management group, with around 16,000 active clients and circa
GBP5.0 billion of Assets under Advice and Management. It has a
growing network of offices in the UK including Abingdon, Beverley,
Darlington, Derby, Egham, Grimsby, Hull, Lincoln, London,
Maidstone, Newcastle, Sheffield (2), Worcester and York with
offices in Johannesburg, South Africa and Atlanta, New York and San
Diego in US.
Kingswood offers a range of trusted investment solutions to its
clients, which range from private individuals to some of the UK's
largest universities and institutions, including investment advice
and management, personal and company pensions and wealth planning.
Kingswood is focused on becoming a leading player in the wealth and
investment management market through targeted acquisitions in the
UK and US, creating a global business through strategic
partnerships.
About Pollen Street Capital
Pollen Street Capital is an independent alternative asset
investment management company focused on the financial and business
services sectors across both private equity and credit strategies.
The private equity strategy is focused on investing in lower middle
market firms which have the capacity to become leaders in their
field across Europe. Pollen Street have deployed over GBP1.2bn
capital into this strategy over the last 14 years delivering strong
returns for its investors that include leading pension funds, asset
managers, banks and family offices from around the world. Pollen
Street Capital has a team of 70+ professionals with offices in
London and New York.
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