TIDMKWG
RNS Number : 1948T
Kingswood Holdings Limited
23 November 2021
23rd November 2021
Acquisition of Metnor Holdings Limited
Kingswood Holdings Limited ("Kingswood") announces it has agreed
to acquire Metnor Holdings Limited ("Metnor") and its subsidiaries,
IBOSS Asset Management Limited ("IBOSS") and Novus Financial
Services Limited ("Novus") (Metnor, IBOSS and Novus together, "the
IBOSS Group").
Bringing together the IBOSS Group and Kingswood Investment
Management creates a leading UK discretionary fund manager (DFM)
business with an enviable long-term investment track record, an
award-winning service proposition, open market distribution, and a
broad range of complementary investment solutions for our
clients.
The transaction boosts Kingswood's UK assets under management
("AuM") to GBP3 billion with a growth aspiration to more than
double this figure over the next three years. The transaction also
supports Kingswood's broader ambition to be a top 10 UK investment
management firm.
In addition to recently announced deals, the acquisition of the
IBOSS Group increases Kingswood's client facing advisory team to 80
people, UK funds under advice/management to GBP6.3 billion, and the
number of active clients to over 15,900.
Kingswood Group assets under administration ("AuA") will total
over GBP7.9 billion from a combination of both global retail and
institutional clients matching our ambition to grow globally as an
international integrated full service wealth and investment
manager
This transaction also provides an attractive exit opportunity
for the IBOSS Group's firms to be acquired by Kingswood without
changing their client investment choices.
Kingswood Holdings Limited (AIM: KWG), the international, fully
integrated wealth and investment management group, is pleased to
announce it has agreed to acquire, subject to regulatory approval,
Metnor Holdings Limited ("Metnor"). Metnor is based in Harrogate
and is the holding company for IBOSS Asset Management Limited
("IBOSS") and Novus Financial Services Limited ("Novus") (Metnor,
IBOSS and Novus together, "the IBOSS Group").
IBOSS is a leading provider of Managed Portfolio Services
("MPS") and other investment solutions on both an advisory and
discretionary basis to UK independent financial advisers ("IFAs")
under the leadership of Investment and Managing Director, Chris
Metcalfe. IBOSS has developed a leading service proposition, as
recognised by a five star rating in the FT Adviser service awards
and an enviable, long term track record of high performance with
low volatility. Novus is a reputable regional IFA meeting the needs
of clients based largely in the North of England.
On an underlying basis for the 12 month period to 31 October
2021, the IBOSS Group generated revenue of GBP3.3 million and
EBITDA of GBP1.3 million. The IBOSS Group currently employs 29
people and has over 6,000 clients with over GBP1.4 billion of
AUA/M. At 31 December 2020, the IBOSS Group had net assets of
GBP3.1 million.
David Lawrence, UK CEO at Kingswood, commented:
"My ambition when taking the reins of Kingswood's UK business
was, and remains, to create a leading financial advisory and
investment management business and this transaction is a big step
towards that goal.
"In the IBOSS Group, Chris Metcalfe has built a fantastic brand
with a superb Investment track record. From our first meeting, we
knew that blending the IBOSS Group with Kingswood would create
something special in the sector, harnessing the IBOSS Group's
investment record, product range and open market IFA distribution
with Kingswood's existing discretionary investment expertise and
rapidly growing financial planning businesses.
"The IBOSS brand and expertise will be retained, with Chris
Metcalfe and his investment team remaining at the helm of the
investment strategy, implementation and servicing. With Kingswood's
resources we aim to accelerate growth and create greater reach into
the IFA sector. The transaction also allows Kingswood to leverage
its successful track record in buying and integrating financial
planning businesses by providing the capital to purchase financial
planning businesses using IBOSS that wish to exit but don't wish to
risk the investment solution provided to their clients.
"Kingswood's tailored Personal Portfolio Service (PPS) will
strongly complement the Portfolio Management Services (PMS) and
Managed Portfolio Services (MPS) products provided by IBOSS, with
Kingswood also benefiting from IBOSS' OEIC products, as together we
develop a full range of investment solutions for clients.
"We remain committed to our growth strategy within the UK and
internationally. This is our fourth acquisition of 2021, and we
have a strong pipeline of high-quality UK opportunities under
negotiation, four of which are in the exclusive due diligence
stage."
Chris Metcalfe Investment and Managing Director at Metnor
commented:
"The synergy of Kingswood and IBOSS gives both parties an
exceptional opportunity to enhance their client propositions and
range of services. We had several potential suitors, but none
realised the intrinsic value of how we manage money and the
attraction for advisers that comes with our industry-leading
service standards and client communications.
"As part of the Kingswood Group, we will offer our new and
existing IBOSS users an exit strategy that will be one of the most
attractive in the industry, something that adviser firms have been
asking us to facilitate for some years now. We are pleased to be
able to deliver precisely what advisers have asked for. For many
adviser firms, continuing the investment proposition and not
disturbing the client is extremely important.
"As we increase our range of investment services, we realised we
would need to keep bolstering our team, especially in light of the
Sustainable range, which is particularly research-heavy. Kingswood
will offer us the ability to build up our investment team with no
affect on to the strategy and methodology."
Consideration and Funding
Upon receipt of regulatory approval, the consideration payable
to the shareholders of Metnor is:
- Initial cash consideration of GBP9.6 million, paid on closing;
- A maximum of GBP6.4 million of deferred consideration, payable
over a two year period, some of which is subject to the achievement
of pre-agreed performance targets; and
- A performance based earn out linked to the three year EBITDA
growth for IBOSS Asset Management Limited.
Each part of the Consideration may be paid in cash or, if a
selling shareholder of Metnor so elects and Kingswood agrees, in
ordinary shares of Kingswood. If the consideration is to be settled
in cash, it will be funded from the issue of 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"). Kingswood's partnership
with Pollen Street grows in strength, and to date has provided
growth equity of GBP44.8 million to support existing and future
acquisitions.
Grant Thornton and Eversheds Sutherland have supported Kingswood
on both due diligence, accounting and legal work, with Simpson Wood
Chartered Accountants and Pannone Corporate acting for Metnor.
For further details, please contact:
Kingswood Holdings Limited +44 (0)20 7293 0730
David Lawrence www.kingswood-group.com
finnCap Ltd (Nomad & Broker) +44 (0)20 7220 0500
Stuart Andrews / Simon Hicks / Abigail
Kelly
GreenTarget (for Kingswood media) +44 (0)20 7324 5498
Jamie Brownlee / Alice Gasson / Jamie.Brownlee@greentarget.co.uk
Ellie Basle
This announcement contains inside information for the purposes
of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it
forms part of UK domestic law by virtue of the European Union
(Withdrawal) Act 2018 ("MAR"), and is disclosed in accordance with
the company's obligations under Article 17 of MAR.
About Kingswood
Kingswood Holdings Limited (trading as Kingswood) is an
AIM-listed (AIM: KWG) international fully integrated wealth
management group with circa GBP7.8 billion of Assets under Advice
and Management. It services circa 8600 clients from a growing
network of offices in the UK including Abingdon, Beverley,
Darlington, Derby, Grimsby, Harrogate, Hull, Lincoln, London,
Maidstone, Newcastle, Sheffield (2), Worcester and York with
overseas 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
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 middle market
firms which have the capacity to become leaders in their field
across Europe. Pollen Street have deployed over GBP1.2 billion
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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END
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