The combined firm will have total AuM of £45 billion.

UK-based wealth firms Smith & Williamson and Tilney are merging, creating a combined business with revenues of around £500 million, a move that rounds off weeks of speculation. The transaction values of the combined business come to an enterprise value of about £1.8 billion ($2.25 billion). The combined business will oversee more than £45 billion in AuM. 

Under the transaction, Smith & Williamson shareholders will be paid £625 million, handled through a mix of cash consideration and shares in the enlarged group. Smith & Williamson management shareholders will be rolling the majority of their investment into the equity of the enlarged group, a statement from Tilney yesterday said. 

The merger of Tilney, founded in 1836, and Smith & Williamson, created in 1881, is another example of the M&A activity that has pulled together a number of UK wealth management houses in recent years, as seen with the Schroders-Cazenove deal of a few years ago, for example, and Old Mutual’s purchase of Quilter Cheviot in 2014. Rising regulatory costs, technology spending and changing client expectations are driving some of these mergers.

The combination puts Tilney’s financial planning and digital investment platform of Bestinvest alongside Smith & Williamson’s investment management capabilities, as well as its accountancy services.

Boardroom
The chairman of the merged business will be Will Samuel and Chris Woodhouse will be group chief executive. Kevin Stopps and David Cobb, joint-CEOs of Smith & Williamson, will join the board of the group on completion. Further details of the combined board will be announced in due course.

“Tilney Smith & Williamson will be responsible for over £45 billion of client assets, of which 80 per cent is in discretionary mandates or funds. It will have a significant number of trusted advisers, including approximately 280 investment managers, 260 financial planners and a professional services business with circa 150 partners and directors,” Woodhouse said.

Tilney was advised on the transaction by Evercore and Freshfields Bruckhaus Deringer LLP. Smith & WIlliamson was advised by Keefe, Bruyette & Woods and Macfarlanes LLP.