Australian technology provider Iress is set to acquire Avelo in a £210m deal.
Iress released a statement to the Australian stock market overnight confirming that it is looking to buy Avelo, which includes the Exchange portal, following enquiries from Money Marketing yesterday afternoon.
Iress, whose wealth management platform Xplan is used by Sesame and Towry, looks to have beaten a number of private equity bids to buy Avelo from Lloyds Development Capital. Money Marketing recently tipped Iress as one of a number of bidders.
The deal, still subject to FCA approval, will see Avelo managing director Simon Badley report to Iress global managing director Andrew Walsh.
It is understood that Walsh may relocate from Australia to lead the integration.
Private equity firm Lloyds TSB Development Capital bought a majority stake in what was then 1st-The Exchange in 2009 for £115m.
Walsh says: “This is a unique and attractive opportunity to establish scale, revenue and relationship footprint in the UK. Avelo has a strong strategic fit with our wealth management business and significantly builds upon our organic success in the UK. It also introduces mortgage sourcing and distribution technology strength that will expand Iress’ capabilities within financial services.”
Walsh says the firm would look at other possible acquisition opportunities in the UK but rules out launching or buying a wrap platform due to concerns about competing with clients.
Avelo has around 500 staff while Iress has just 15-20 staff in the UK, although it pools resources from its Australian and South African businesses. Walsh says key Avelo staff and senior management are being retained as part of the deal but the firm will be looking to make cost savings in the future due to a number of overlaps.
No decision has been made regarding branding but Walsh says one global brand will be used in the future, which suggests the Avelo brand will be dropped at some point.
Iress’ half year results, also published today, show its UK arm made a pre-tax loss of £1.14m for the first half of the year, compared to a loss of £830,000 for the same period the previous year. The losses were attributed to the early stage delivery costs of its Xplan advice platform.
There has been plenty of takeover activity in the adviser technology space in recent months. Private equity firm HgCapital bought a majority stake in Intelliflo last month, while adviser portal Assureweb was bought by American technology firm ipipeline in May and was subsequently rebranded.