Acquisition of Doherty Pension & Investment
20/04/2023 07:00
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RNS Number : 8293W Mattioli Woods PLC 20 April 2023
20 April 2023
Mattioli Woods plc
("Mattioli Woods", "the Company" or "the Group")
Acquisition of Doherty Pension & Investment Consultancy Limited
Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management
business, is pleased to announce the acquisition of 100% of the share capital
of Doherty Pension & Investment Consultancy Limited ("Doherty's") from its
shareholders ("the Sellers") for a total consideration of up to £15.048
million on a cash-free, debt-free basis ("the Acquisition").
Highlights
· Doherty's is one of the largest financial planning and wealth
management businesses in Northern Ireland, with specialist pension expertise
and a discretionary investment management offering;
· Total consideration of up to £15.048 million comprising upfront
consideration of £6.78 million in cash and £2.0 million in new ordinary
shares in Mattioli Woods ("Consideration Shares"), plus deferred consideration
of £1.5 million and contingent consideration of up to £4.768 million
payable in cash in the two years following completion, dependant on Doherty's
meeting and outperforming forecast earnings;
· Compelling rationale, as the Acquisition, inter alia, is a high
quality opportunity that extends and scales the Group's existing operations in
Northern Ireland, adds investment expertise to the Group's existing
discretionary management proposition and adds experienced advisers to the
Group's consultancy team; and
· The Acquisition is expected to be earnings enhancing in the first
full year of ownership.
Consideration
The total consideration of up to £15.048 million comprises:
· An initial consideration of £8.78 million (subject to adjustment
for the value of net assets acquired) comprising £6.78 million in cash plus
£2.0 million in Consideration Shares, equating to 325,998 shares;
· Deferred consideration of £1.50 million, payable in cash split in
equal amounts between the first and second anniversaries of completion; and
· Contingent consideration of up to £4.768 million, payable in cash
split in equal amounts between the first and second anniversaries of
completion, subject to certain financial targets based on forecast earnings
before interest, tax, depreciation and amortisation ("EBITDA") generated
during that period.
In addition, contingent employee remuneration of up to £0.23 million is
payable subject to the satisfaction of certain performance conditions in the
two years following completion.
Transaction overview
· Founded in 1985, Doherty is an established financial planning and
wealth management business with specialist pension expertise and a
discretionary investment management offering;
· Doherty's currently advises approximately 1,320 private clients,
including specialist pension advice on SSASs, with combined assets under
advice and administration of over £635 million;
· Doherty's enjoys a strong regional presence in Belfast. The
business employs 28 staff and Doherty's experienced management team will be
retained by Mattioli Woods following the Acquisition;
· The Acquisition has a compelling strategic rationale:
- In line with the Group's strategy to explore high quality
acquisition opportunities, alongside our continuing focus on organic growth;
- Potential revenue synergies through offering Doherty's clients
access to Mattioli Woods' bespoke investment products (including discretionary
portfolio management), specialist SIPP pension administration, flexible
employee benefits platform and alternative investment strategies;
- Adds scale to the Group's existing operations in Northern Ireland;
- Adds six advisers to the Group's consultancy team; and
- The migration of the SSAS portfolio onto Mattioli Woods' proprietary
pension administration platform offers potential operational efficiencies.
· In the year ended 31 December 2021, Doherty's generated revenues of
£2.92 million with a profit on ordinary activities before taxation of £1.45
million. At 31 December 2021 Doherty's gross assets were £7.98 million and
net assets were £7.46 million, including £5.16 million of cash and £2.24
million of listed investments.
· The Acquisition is expected to be earnings enhancing in the first
full year of ownership.
Payment of the initial cash consideration, deal costs and estimated net asset
completion price adjustment has resulted in a net cash outflow at completion
of £5.84 million (net of estimated cash acquired).
Admission of Consideration Shares
To satisfy the £2.0 million of share consideration, 325,998 Consideration
Shares have been issued at a price of 613.5 pence per share. Application has
been made to AIM for the admission of the Consideration Shares to trading
("Admission"). Admission of the Consideration Shares, which will rank parri
passu in all respects with Mattioli Woods' existing shares in issue, is
expected to become effective on 25 April.
Following the issue of the Consideration Shares, the total number of ordinary
shares of 1p each ("the Ordinary Shares") in the Company with voting rights
will be 51,633,836. Mattioli Woods does not hold any Ordinary Shares in
Treasury. The figure of 51,633,836 Ordinary Shares may be used by
shareholders in the Company as the denominator for the calculations by which
they will determine if they are required to notify their interest in, or a
change to their interest in, the share capital of the Company under the
Financial Conduct Authority's Disclosure Guidance and Transparency Rules.
The Sellers have entered into a lock-in deed with Mattioli Woods and its
nominated adviser and broker, Canaccord Genuity Limited, restricting sales of
the Consideration Shares during the two years following completion.
Commenting on the Acquisition, Michael Wright, Group Managing Director of
Mattioli Woods, said:
"It is very rare that such a great opportunity to bring one of the largest
financial planning businesses in Northern Ireland into the Mattioli Woods
Group presents itself. In over 30 years of operations, Doherty's has built a
solid and respected reputation, with integrity and professionalism at the
heart of its client service. It was clear from our initial discussions that
Doherty's is a great fit culturally and strategically, including a focus on
long-term client relationships, serving a similar client base to our existing
business. This acquisition is an important step forward for Mattioli Woods,
strengthening our position as the only SSAS and SIPP operator based in
Northern Ireland.
"We are delighted to welcome Terry, Alan, John and their team into the Group.
There are many complementary elements between our businesses enhancing our
specialist pension, discretionary portfolio management and financial planning
propositions. We believe the range of products and services that Mattioli
Woods has to offer can support the excellent outcomes from which Doherty's
clients already benefit."
Terry Lappin, Managing Director of Doherty's, added:
"We are delighted to be joining the Mattioli Woods Group as the synergy
between our companies was obvious from our very first discussion. This can
only improve our client offering and we are looking forward with enthusiasm to
what can be achieved".
- Ends -
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of United Kingdom
domestic law by virtue of the European Union (Withdrawal) Act 2018.
For further information please contact:
Mattioli Woods plc
Ian Mattioli MBE, Chief Executive Officer
Ravi Tara, Chief Financial Officer Tel: +44 (0) 116 240 8700
Michael Wright, Group Managing Director www.mattioliwoods.com
Canaccord Genuity Limited (Nominated Advisor and Joint Broker)
Emma Gabriel Tel: +44 (0) 20 7523 8000
Tom Diehl www.canaccordgenuity.com
Singer Capital Markets (Joint Broker)
Justin McKeegan
Tom Salvesen Tel: +44 (0) 20 7496 3000
Alaina Wong www.singercm.com
Media enquiries:
Camarco
Julia Tilley Tel: +44 (0) 20 3757 4998
www.camarco.co.uk
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