Kingswood to acquire Harrogate-based Metnor Holdings

The AIM-traded firm described IBOSS as a “leading provider” of managed portfolio services and other investment solutions on both an advisory and discretionary basis to UK independent financial advisers, under the leadership of investment and managing director Chris Metcalfe.

On regulatory approval, the consideration payable to the shareholders of Metnor would consist of an initial cash consideration of £9.6m paid on closing, and a maximum of £6.4m of deferred consideration payable over a two-year period, some of which would be subject to the achievement of pre-agreed performance targets.

A performance-based earn out would also be payable, linked to the three-year EBITDA growth for IBOSS Asset Management.

Kingswood said IBOSS had developed a “leading service proposition”, recognised by a five-star rating in the FT Adviser service awards, and a long-term record of high performance with low volatility.

Novus, meanwhile, was described as a reputable regional independent financial adviser, meeting the needs of clients based largely in the North of England.

On an underlying basis for the 12 months ended 31 October, the IBOSS group generated revenue of £3.3m and EBITDA of £1.3m.

The IBOSS group currently employed 29 people, and had more than 6,000 clients with over £1.4bn of assets under advice or management.

As at 31 December 2020, the IBOSS group had net assets of £3.1m.

“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,” said Kingwood’s UK chief executive officer David Lawrence.

“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.”

Lawrence said the IBOSS brand and expertise would 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 would “strongly complement” the portfolio management and managed portfolio services products provided by IBOSS, David Lawrence said, with Kingswood also benefiting from IBOSS' OEIC products, as together it developed 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.”

At 0902 GMT, shares in Kingswood Holdings were down 0.88% at 28.25p.