St James’s Place’s acquisition of Technical Connection is set to cost the firm up to £1.6m.
SJP’s accounts, published yesterday, show the wealth management giant could pay as little as £400,000 for the consultancy as £1.2m of the deal is based on hitting performance targets.
Technical Connection will receive a £400,000 cash payment in April next year.
“Subscription revenue and consultancy hours booked” will be among performance targets the firm needs to meet to be due a further £400,000 in April 2018 and £800,000 the following April.
The figures feature in the accounts of SJP subsidiary SJP Wealth Management Group, a holding company for the firm.
The accounts read: “It is expected that these will be paid in full with no changes to the amount initially recognised. However, if the performance targets were not met, the contingent consideration will decrease at a rate agreed on acquisition.”
In its group accounts in February, SJP confirmed that the contingent payments decrease would be “on a pro-rata basis down to a value of £nil”.
It said it valued the “goodwill” generated from Technical Connection’s expertise at £3.7m.
SJP first announced the acquisition last April, after working for 15 years with the support services provider, but did not disclose the sum of the deal.
The subsidiary accounts list a total investment of £4.5m in Technical Connection.