UK-listed Merchant Securities, which provides services including private client investment management, has entered an agreement to buy the UK financial advisory firm, Cavendish Young.

The acquisition of Cavendish Young, which is based in central London, involved initial consideration of £65,000 (around $107,000), of which £32,500 was paid on completion, with the balance payable following agreement of the completion balance sheet, Merchant Securities said in a statement.

Further deferred consideration may become payable dependent upon two factors: the future profitability of Cavendish Young in the financial period ending 31 March 2014, with a potential deferred consideration in this regard capped at £800,000 and the amount of funds which come under the discretionary management of the Group over the same period, with an additional potential deferred consideration capped at £500,000. This gives a maximum potential total consideration of £1.3 million. 

Cavendish Young, which was formed in 1999, manages £46 million for high net worth individuals and has a total client base of 2,500 private clients.

The sellers of Cavendish Young are Mark Estcourt, the founder and managing director of the company, and his wife Tracy Estcourt. Mr Estcourt has entered into a new service agreement with Cavendish Young.