Acquisition of two IFA books of contracts

RNS Number : 1269Q

Manx Financial Group PLC

25 November 2016

 

FOR IMMEDIATE RELEASE                                          Date: 25^th November 2016

Manx Financial Group PLC (the 'Company')

Acquisition of two Independent Financial Adviser ('IFA') books of contracts

Manx Financial Group PLC (www.mfg.im) announces that Edgewater Associates Limited ("EWA"), a wholly owned subsidiary (www.edgewater.co.im), and the Isle of Man's leading retail IFA, has entered into an agreement with Knox Financial Services Limited, a subsidiary of the Knox Group of Companies, to acquire the majority of the Island's IFA business held by Knox Financial Services Limited ("KFSL"). The initial acquisition includes approximately 4,000 clients together with 6 members of staff, generating an anticipated annual renewal income of up to £0.3 million. In tandem, both parties will enter into an Option agreement, exercisable within three months from the transaction date, for EWA to acquire the remainder of the vendor's IFA business which includes approximately 150 clients generating an anticipated additional renewal income of up to £0.1 million. Both acquisitions have received regulatory approval.

KFSL's IFA businesses currently compete with EWA's retail business and enjoy a similar client profile. This consolidation under EWA's ownership will provide their clients with immediate access to EWA's regulated advice and service, enhanced by the recent investment in systems. In addition, the employment of those staff directly related to advising clients will ensure continuity of contact during the transfer and beyond.

The combined consideration for both transactions will be £1.7 million in cash, funded by Manx Financial Group, based on four times actual renewal income. The payments for both transactions will be in stages: being a total £0.9 million at completion; and a total of £0.2 million at the nine-month milestone and a final reconciling payment on the first anniversary of each acquisition.

The anticipated operating profit of the enlarged EWA business is expected to increase by more than £0.4 million in a normalised year. Combined assets under the management of EWA will increase by approximately £90 million to £0.3 billion. The total number of clients, post acquisitions, will be in excess of 11,000, incidentally being 13% of the Island's population.

Denham Eke, CEO of Manx Financial Group, commented: "These acquisitions are a very positive development for both Edgewater Associates and Manx Financial Group. We look forward to welcoming our new clients and providing financial advice with a more active and responsive service in wealth management, retirement planning, protection, loan broking and general insurance. Our investment in systems means that we will be able to operate the businesses at a reduced cost, both to the benefit of clients and our profitability alike. I anticipate that this will be the first of a number of market consolidations and hope to be able to report further acquisitions in due course."

For further information, please contact:

Manx Financial Group PLC  Denham Eke  Tel [phone] Beaumont Cornish Limited Roland Cornish/James Biddle Tel [phone] Britton Financial PR Tim Blackstone Tel  [phone]

 

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