Arc Fund Management has bought IFA Throgmorton Asset Management in a deal potentially worth £1.6m.
The acquisition is Arc’s first step into a wealth management division.
Throgmorton has around £150m of fund assets under advice and earned £210,000 on turnover of £1.57m for 2006. It was founded in 2002 to offer advice to small businesses and high-net-worth individuals.
The purchase will see Arc’s funds under management double to £275m.
Arc has paid an initial £1.2m for the Leicesterbased firm, which has 12 offices across the UK. A further £450,000 will come through the issue of three million new ordinary shares valued at 0.5p to be paid, subject to TAM reaching its performance targets up to December 2008, amounting to a total of £1.1m.
Arc has also issued a further six million ordinary shares to be held in a trust subject to the same performance guidelines. Application will be made to the London Stock Exchange for the nine million ordinary shares to be admitted to trading on Aim and trading is expected to start on Friday.
Arc chief investment officer Christopher Rowe says: “This deal improves our presence in the market but, more important, it is with a firm that understands us and that we get along with.
“It is also a firm that is moving to the higher-end bracket for clientele, which is an important part of the development of our wealth management division.”