25th Jun 2014 11:04
LONDON (Alliance News) - European Wealth Group Ltd Wednesday said it has agreed to acquire Compass Financial Benefits Ltd, an independent financial advisory with GBP31.0 million of funds under its influence, marking the company's first acquisition since the acquisition of European Wealth Management Group Ltd.
In a statement, the group said that it will acquire Compass for up to three times its recurring income for the 12 months after the completion of the deal. It will pay GBP539,150 in an initial tranche payment. Half of that will be paid in cash, with the other half to be paid by issuing new shares at 100 pence each.
In addition European Wealth Group said it has raised about GBP674,000 through a placing of 749,303 new shares at 90 pence each with new and existing investors, as well as some employees. European Wealth shares were Wednesday quoted at 100.00 pence, untraded.
In 2013, family-run, Surrey-based Compass had GBP434,230 in revenue, with just over three-quarters of that classified as recurring income. Pretax profit was GBP154,250. The business will be relocated and fully integrated into European Wealth's head office in London under the terms of the acquisition.
"Whilst small, it will not only strengthen our presence in the group personal pension scheme market where we see significant opportunities domestically, but also allow us potentially to leverage our investment management services to Compass's clients," Executive Chairman John Morton said in a statement.
"We also see significant scope for improving Compass's operating costs whilst at the same time continuing to grow our overall funds under management and influence. We consider our AIM listing as an important mechanism for completing further selective acquisitions as we continue to increase our funds under management and influence," Morton added.
European Wealth Group came to market after EW Group Ltd acquired European Wealth Management Group Ltd in April.
By Samuel Agini; [email protected]; @samuelagini
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