Australian technology pro-vider Iress is set to acquire Avelo in a £210m deal.
A statement to the Australian stockmarket earlier this week confirmed Iress’s intention to buy Avelo, which includes the Exchange portal, following enquiries from Money Marketing.
Iress, whose wealth management platform Xplan is used by Sesame and Towry, beat a number of private equity bids to buy Avelo from Lloyds Development Capital. Money Marketing recently tipped Iress as lead bidder.
The deal, 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: “Avelo has a strong strategic fit with our wealth management business and significantly builds on our organic success in the UK.”
He says the firm will look at other UK acquisition opportunities but rules out buying a wrap platform due to concerns about competing with clients.
Avelo has about 500 staff while Iress has only 15 to 20 employees in the UK, although it pools resources from its global businesses. Walsh says key Avelo staff and senior management will be retained.
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’s half-year results, also published this week, show its UK arm made a pre-tax loss of £1.14m, compared with a loss of £830,000 for the same period last year. The losses were attributed to early-stage delivery costs for its Xplan advice platform.
Plan Money director Peter Chadborn says: “IFAs switch between these providers not because their current one is poor but when someone offers something new. So Iress will have to pump some money in if it wants to expand.”