Consolidator AFH is set to spend more than £1m acquiring the assets of two IFA firms.
AFH has acquired Aberdeenshire-based Aberdeen Wealth Management and Devon-based Shield Direct.
Only Aberdeen Wealth director Mike Murray will stay on with AFH as an adviser, with the rest of the selling IFAs retiring and their clients passed to existing AFH advisers.
AFH will pay a maximum of £556,500 for Aberdeen. £294,000 will be paid upon completion out of AFH’s cash reserves, with a further £262,500 payable over the next 26 months if the acquired assets meet performance targets.
Shield also has a 26 month earn-out clause, potentially adding £248,000 on to the £272,000 initial cash consideration from AFH.
The £1.1m purchase will add £44m to AFH’s funds under management – a maximum consideration of 2.45 per cent of the assets acquired.
AFH chief executive Alan Hudson says that that the acquisitions represent “the increasing level of activity that we are seeing in the market.”
Hudson says: “The acquisition of Aberdeen will strengthen our position in Scotland and I look forward to working with Mike to continue the development of AFH. The acquisition of Shield will bring a number of high quality clients spread across the South West and West Midlands.”
AFH acquired Lancashire firm David Rushton Associates for £298,125 in December, the equivalent of just 1.8 per cent of funds under management.