Towry and Ashcourt Rowan have agreed on a transaction under which Towry will buy all the issued and to-be-issued share capital of the other firm, producing a combined business to be a “major player in the UK private wealth market”.
Towry and Ashcourt Rowan have agreed on a transaction under which Towry will buy all the issued and to-be-issued share capital of the other firm, producing a combined business to be a “major player in the UK private wealth market”, they announced today.
Under the terms of the transaction, Ashcourt Rowan shareholders will be entitled to receive for each share a sum of 270 pence in cash plus a principal amount of 5 pence in loan notes. The transaction represents a value of around £97 million ($146 million) for Ashcourt Rowan’s entire issued and to-be-issued share capital, the statement said.
“Given the high degree of complementarity between the two businesses, both Towry’s and Ashcourt Rowan’s boards believe that the combination has a clear strategic and financial rationale. The combination is expected to be one of the top 20 players in the UK private wealth market by assets under management,” it said.
The transaction, if approved, represents another merger and acquisition move in the UK wealth management industry over the past few years. As regulations and other cost pressures bite, firms have sought to build scale to remain competitive.
Ashcourt Rowan directors, who were advised on the matter by Cantor Fitzgerald, say the terms of the deal are fair and reasonable and recommend shareholders back the deal.
Ashcourt Rowan provides a range of expert, integrated wealth management and employee benefits consultancy services for individuals, families, charities and trusts, business owners and employers. Ashcourt Rowan manages or has under influence over £5 billion in assets, of which £2.3 billion are on a discretionary or managed basis, from 16 offices in the UK with around 340 staff. Towry manages or advises on over £6 billion in assets and has around 800 employees serving clients from a national network of approximately 20 offices.
Towry specialises in providing financial planning and discretionary investment management services to private individuals including entrepreneurs, business owners, directors and senior executives with investable assets in excess of £250,000. It has approximately 22,000 clients.
Towry is principally owned by funds managed by Palamon Capital Partners, a European private equity partnership that invests growth capital in European lower midmarket companies.
"The two firms were always a good potential fit given the different altitudes in which they operated in terms of client segments. Together there is a positive story for a more complete wealth service business covering both the affluent and HNW. The firms had a good deal in common in terms of their overall philosophy surrounding the provision of wealth solutions. If they had not merged they were going to increasingly encroach on each other’s territory," Sebastian Dovey, managing partner at Scorpio Partnership, the consultancy, said.
"The deal does place a new impetus on Palamon Capital Partners [backers of Towry] in regards to the capital value creation of the business. We had expected for some time to see a bold move from them. This is certainly that. It shouts a strong signal of intent to establish a credible mid-market operator in the £10-20 billion AuM tier," he said.