Mattioli Woods acquires Pole Arnold in £4m deal

Specialist wealth and asset management company Mattioli Woods announced the acquisition of Pole Arnold Financial Management from its shareholders on Tuesday, for initial consideration of £4m and potential further consideration of up to £3m.

The AIM-traded firm said that additional consideration would depend on specific performance targets in the two years after completion.

It described Pole Arnold as a firm of experienced financial advisers, established in 2012 and providing “highly personalised advice” to around 360 private and corporate clients with about £245m of assets under management and advice.

Pole Arnold is based in Leicester, and employs 16 staff, all of whom would remain with Mattioli Woods following completion.

The board said that like Mattioli Woods, Pole Arnold specialises in the provision of fee-based financial planning, with the complementary product offerings providing scope for potential revenue synergies, while maintaining the “strong cultural commitment” of both companies to putting clients first.

In the year ended 31 March 2020, Pole Arnold generated revenue of £2.11m with a profit before tax of £0.81m.

At that date, Pole Arnold's gross assets totalled £1.12m and net assets came in at £0.63m, including £0.96m of cash.

The acquisition was expected to be earnings enhancing in the first full year of ownership.

Mattioli Woods said it would pay initial consideration of £4m on a cash-free, debt-free basis, subject to adjustment for the value of net assets acquired, comprising £3.5m in cash and 72,940 new shares in Mattioli Woods.

Contingent consideration of up to £3m would be payable in cash on the first and second anniversaries of completion, subject to certain profit targets being met.

Payment of the initial cash, deal costs and estimated net asset completion adjustment had resulted in a net cash outflow at completion of £3.1m, net of estimated cash received on acquisition.

“We are delighted to welcome Mike [Pole] and his experienced team as part of Mattioli Woods,” said chief executive officer Ian Mattioli.

“I have known Mike for many years and admired how he and his team have grown a great business, built on a strong client-focussed culture and a commitment to going the extra mile.

“The transaction expands the group's presence in both Leicester and London, underlining our commitment to continuing growing both organically and by acquisition.”

At 1608 BST, shares in Mattioli Woods were up 0.71% at 695p.