Consolidator looks to raise acquisition funds in new share offer

AFH Alan Hudson 700
AFH chief executive Alan Hudson

Consolidator AFH Financial Group is planning to raise £10m in acquisition capital through a new share placing.

The firm says net proceeds of the 175 pence per share placing will be used to “execute the company’s acquisition pipeline and for general corporate purposes”.

In February, AFH made its fourth acquisition of 2017, acquiring Honiton-based IFA Bay Financial Management, adding around £73m to its funds under management.

Since October, the firm announced five acquisitions paying a combined £2m in initial cash considerations.

AFH chief executive Alan Hudson has agreed to sell up to 1 million of his existing ordinary shares at the placing price, which would raise gross proceeds of up to £1.75m.

AFH says in a statement: “The board believes the opportunity exists to acquire appropriately priced businesses and that the net proceeds of the placing will provide the company with a strong platform to finance such acquisition opportunities as well as providing funds for general corporate purposes.”

AFH says in the short term it is evaluating four potential deals, while it says the company continued to assess other potential acquisitions “to further accelerate its growth”.

The consolidator also said it had “strong recurring revenue”, adding to its funds under management.

As at 1 March 2017, AFH says the cash considerations for its target firms had been “fully funded to satisfy the deferred consideration liabilities of announced acquisitions to date as they fall due”.