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Close Brothers to acquire Cavanagh for £26.2m

Close Brothers is to acquire national IFA firm Cavanagh in a £26.2m deal.

The move follows Close Brothers acquisition of Bristol-based Chartwell Group in September 2010 and Allenbridge Group in February 2011 and will take the total number of advisers in its subsidiary Close Asset Management to 116.

The Cavanagh management team, Andrew Fay, Simon Redgrove, Neil Millard and Charles Gillespie, and a number of other employees have agreed to exchange 50 per cent of what they are entitled to under the deal for Close Brothers shares.

The Cavanagh brand will be dropped after a transition period. Fay will be appointed Close Asset Management head of wealth management business development, Redgrove head of personal advice and Gillespie head of corporate advice.

Fay, Redgrove and Millard have agreed to hold their Close Brothers shares for at least three years and Gillespie has agreed to hold his for at least 18 months.  

Close Brothers will pay 220p per share for the listed firm which has around 60 advisers and private client and corporate assets of over £2bn. Cavanagh estimates around £1.5bn of the assets are revenue generating.

Close Brothers chief executive Preben Prebensen says: “This acquisition represents a further step in the execution of our strategy to build a high quality private client offering and to become a leader in UK wealth and asset management.”

Cavanagh chairman Paul Sinnett says: “The price offered by Close reflects the value created over the past 15 years through the dedication of the staff and management team. The acquisition of Cavanagh by Close represents the logical next step in the continued development of the Cavanagh business and will benefit both our clients and employees.”

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