Curtis Banks is to acquire Legal & General-owned Sipp provider Suffolk Life for £45m.
The deal, subject to regulatory approval, will raise £27m through a placing of new oridinary shares. The remainder will be funded through a debt and revolving credit facility.
The combined group will have assets under administration of around £18bn and over 65,000 Sipps under administration.
L&G bought Suffolk Life in 2008 for £62m in a deal that is widely regarded as having overvalued the Sipp provider.
In June 2015 Suffolk Life announced it would cease acquisitions over concerns it could not adequately assess the quality of Sipp back books.
Curtis Banks entered the Sipp market in 2009 and listed on the AIM in May 2015 with a valuation of £85m.
Pre-tax profits rose 82 per cent in the first six months of 2015, to £2.1m, driven by the impact of three acquisitions: Pointon York in October 2014, Rathbones Pensions and Advisory Services in December 2014 and Friends Life’s Sipp book in March 2015.
In October 2015 it signed a multi-million pound deal to administer Zurich’s Sipp book.
Curtis Banks executive chairman Chris Banks says: “We are delighted to announce the acquisition of Suffolk Life. Following this Curtis Banks will be the second largest independent full Sipp provider in the UK.
“We believe Suffolk Life has a strong heritage, culture and client focus which we share at Curtis Banks. We will retain Suffolk Life’s headquarters in Ipswich and believe there will be continuity for clients and exciting opportunities for Suffolk Life’s management and employees as part of the enlarged group.”
L&G chief finance officer Mark Gregory says: “L&G is delighted to have played a part in the success of Suffolk Life.
“It is a great business, but it is not core to our focused strategy going forward. Teaming up with Curtis Banks will help it to realise its strong potential, by creating one of the UK’s largest Sipp providers.”
Suffolk Life managing director Will Self says: “We are excited about the opportunities this deal will give. It will create the UK’s largest full Sipp provider, managing the UK’s largest Sipp property portfolio, and delivers a stable yet exciting future for both our existing investors and our staff.”