Mattioli Woods, the wealth management and employee benefits business, has acquired Broughtons Financial Planning in a deal worth up to £4m. 

Based in Oldbury in the West Midlands, Broughtons was founded in 2001 and provides wealth advice and administration for 250 individual clients, with over £120m of assets under advice. 

Broughtons’ management team will be retained by Mattioli Woods following the deal which is expected to be earnings enhancing in the first full year of ownership.

In the year ended 31 July 2017, Broughtons generated a profit before taxation of £0.62 million on revenues of £0.99 million. 

The total consideration comprises:

• An initial consideration of £2.7 million (subject to adjustment for the value of net assets acquired), comprising £2.1 million in cash plus 77,171 new ordinary shares of 1 pence each in Mattioli Woods which are valued at £0.6m based on the closing price of a Mattioli Woods share on 8 August 2018; and
• Deferred consideration of up to £1.3m payable in cash in the two years following completion, subject to certain financial targets being met based on growth in earnings before interest, tax, depreciation and amortisation generated during that period.

Payment of the initial cash consideration, deal costs and estimated net asset adjustment resulted in a cash outflow at completion of £2.2m, said Mattioli Woods. 

Ian Mattioli, chief executive of Mattioli Woods, said: “Broughtons has a similar culture to Mattioli Woods and holds high values with the client being at the core of all it does.  The combined business gives us all opportunities to grow and develop the client offering and we welcome Gary and his team.  Long term stability and sustainability is key to growing a modern financial services group and we will all continue to strive to achieve this”.

Gary Bond, Broughtons’ managing director, said: “From our initial discussions with Mattioli Woods it was clear that we shared the same values and business culture.  We are all excited by the opportunity this gives us as we work to create a great financial services business and to be part of a large group which has clients at its core.”