Tavistock Investments, the acquisitve advisory firm consolidator, is to buy Abacus Associates Financial Services Limited for just under £5.2m, pushing up the number of Tavistock advisers to more than 300. 

Abacus is an IFA firm headquartered in Hereford, with 45 predominantly self-employed financial advisers covering the North East, the Midlands and the South West of the country. It is directly authorised and Tavistock says FCA approval has been received for the transaction. Abacaus will become a wholly-owned subsidiary from 1 April 2016.

In the year ended 31 January, Abacus reported pre-tax profits of £781,000 on turnover of £4.5 million. It also reported net assets of £1.59 million, which included £1.23 million in cash. The company’s assets under influence are estimated to exceed £650 million, of which some £250 million are managed directly by Abacus on an advisory basis.

Malcolm Harper, Abacus’ founder and managing director, said: “I’ve been searching for the right partner to help me take Abacus to the next level, and Tavistock impressed me as the best option.

"They provide a range of discretionary investment solutions that will suit many of our clients and share our ethos for transparency and quality of customer care. The transaction has also ensured the potential for a retirement exit for each of our advisers at a time that suits them. I will remain as a significant stakeholder in the enlarged group and am looking forward to working with the Tavistock team.”

Tavistock says it will retain the Abacus brand and Mr Harper will continue to lead the business, as well as take on wider responsibility as part of the group’s senior management team.

The fixed initial consideration for the transaction is £5.165 million including a payment of £4.165 million at completion, of which £2.535 million is to be settled in cash, £0.13 million through the adoption of a debt obligation, with the balance of £1.5 million satisfied through the issue to the vendor of 20m new ordinary shares of 1p each in the capital of the Company at an issue price of 7.5p per share; a further £1 million is to be settled in cash on the first anniversary of completion.

The vendor is also entitled to potentially receive a performance-related deferred consideration, payable in cash in July 2018, subject also to certain other conditions relating to quality of service and customer satisfaction.

Brian Raven, Tavistock’s chief executive, said: “We are delighted that Abacus has become part of the Tavistock Investments Group. Tavistock is extremely selective when it comes to identifying businesses with which it would like to partner, and this agreement is testament to the strength and quality of Abacus, which is an ideal cultural fit.

"This transaction also signals a significant milestone for Tavistock as we move into healthy profitability at group level. Less than two years after completing our initial transaction, we are established as a national brand with over 300 advisers, FUA approaching £4 billion and FUM of £425 million - £250 million in advisory models and £175 million in discretionary portfolios.”