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Openwork paid nothing for 2Plan

Openwork paid nothing for its acquisition of 2Plan Wealth Management, Zurich’s half-year results reveal.

Openwork, which is 25 per cent owned by Zurich, acquired national IFA 2Plan in July 2011 after announcing the deal in September 2010.

Zurich’s group results for the six months to the end of June, announced last week, provide more details about the terms of the acquisition. At the time, it was reported that Openwork acquired 2Plan for “an undisclosed sum”.

The results say: “On July 12, as part of its preparations for local regulatory changes, the group completed the acquisition of 75 per cent of 2Plan Group, an independent financial advice firm based in the UK. The total purchase price for the acquisition amounted to zero.”

Prior to the deal Standard Life owned a 15 per cent stake in 2Plan, and co-founders Chris Smallwood (pictured) and Chris Davies owned the remaining 85 per cent.

Smallwood and Davies have retained a 25 per cent stake, with the option to sell their holdings to Openwork based on future profit targets being hit by 2Plan.

The results reveal at the time of the deal, 2Plan had tangible net assets of minus $5m, and identifiable assets of $2m made up of software and recruitment director fees.

Zurich estimates 2Plan will eventually be worth $3m, after revising down its original $4m estimate.

Barretts Financial Solutions senior partner Kim Barrett says: “From a business perspective I do not know why Openwork did this deal. It may be that Openwork thinks there is hidden value to be gleaned from 2Plan. But why not acquire one of the many adviser businesses up for sale that have a positive financial position?”

Openwork was unavailable for comment.


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There are 4 comments at the moment, we would love to hear your opinion too.

  1. Nice to see a business get a realistic valuation.

  2. Sad times ahead for 2plan, restricted here we come

  3. this does not amaze me, after working for open work for a while the principal director seemed to have a propensity in paying the FSA ongoing fines to cover previous bad advice and poor ethics,

    when one comes to a cross one should not go the extra mile

  4. And what has become of the tangible net assets of minus £5m? If Zurich took on responsibility for addressing that rather big minus balance, then it might be argued that, in a way, it paid 75% of £5m for 2Plan.

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