Kingswood to buy Kent-based Smythe and Walter

Wealth and investment management company Kingswood has agreed to acquire, subject to completion, the business assets of Smythe and Walter, an independent financial planning business servicing clients across Kent.

The AIM-traded firm said that following completion, £0.42m would be paid immediately, and up to £0.42m would be payable on a deferred basis over two years, subject to the achievement of pre-agreed performance targets.

It said the acquisition was being funded from cash, received from the issue of new convertible preference shares under its subscription agreement with HSQ Investment - a wholly-owned indirect subsidiary of funds managed or advised by Pollen Street Capital.

Kingswood said its partnership with Pollen Street was growing in strength, and to date had provided growth equity of £44.8m to support existing and future acquisitions.

“Smythe and Walter are a growing firm and this acquisition enhances our existing footprint in the South East,” said Kingswood’s UK chief executive officer David Lawrence.

“I am delighted to welcome Lee Smythe and his team to Kingswood.

“This is our third acquisition of 2021, and we continue to have a strong pipeline of high-quality UK opportunities under negotiation, five of which are in the exclusive due diligence stage.”

Lawrence said Lee Smythe was the head of a team of three, who looked after around 100 client households with about £40m in assets under management, advising on “all aspects” of personal financial planning.

For the year ended 31 March, Smythe and Walter reported revenues of £0.29m, profit before tax of £0.1m, and had net assets at that date of £9,700.

Lee Smythe, chief executive officer of Smythe and Walter, said that with an “ever-increasing regulatory burden”, joining Kingswood would enable the firm to gain access to the resources and support needed to provide a wider range of services to current clients, and to grow future business in a cost-effective way.

“In addition to this, given the events of the last 18 months or so, becoming part of a larger firm ensures a greater sense of security for both staff and clients alike,” Smythe added.

“With the additional support functions in place, I am looking forward to being able to spend more time on the most important and enjoyable part of our business, looking after our clients.”