Acquisition of holding in White Mortgages Limited

27 April 2023

Mattioli Woods plc

("Mattioli Woods", "the Company" or "the Group")

Acquisition of holding in White Mortgages Limited

Mattioli Woods plc (AIM: MTW.L), the specialist wealth and asset management business, is pleased to announce it has acquired 50.1% of the issued share capital of White Mortgages Limited ("White Mortgages") from Steven White ("the Seller") for a consideration of £0.425 million.

Mattioli Woods has also entered into an option agreement with the Seller, Mark Sutton and Robert White ("the Shareholders") which entitles Mattioli Woods to acquire the remaining 49.9% of White Mortgages ("the Call Option"). The Call Option is exercisable by Mattioli Woods at any time during the 24-month period commencing 27 April 2026 for a cash consideration. If Mattioli Woods does exercise the Call Option, the consideration payable on exercise will be up to £2.625 million, dependent on the attainment of specified targets in the 12 months prior to the exercise date.

Founded in 2011, White Mortgages specialises in providing independent mortgage advice, whilst also offering bespoke protection advice. White Mortgages is based in Lincoln, UK and employs an experienced team of nine staff, comprising four advisers and five administrative staff, all of whom will remain with Mattioli Woods following completion.

In the year ended 31 March 2023, White Mortgages generated revenues of £0.68 million with a profit before taxation of £0.35 million. The acquisition is expected to be earnings enhancing in the first full year of ownership. 

The total consideration comprises:

· An initial consideration of £0.425 million on a cash-free, debt-free basis (subject to adjustment for the value of net assets acquired), payable in cash; and

· Call Option consideration of up to £2.625 million payable in cash during the 24-month period commencing 27 April 2026 if the option is exercised. 

Payment of the initial cash consideration, deal costs and estimated net asset completion adjustment has resulted in a net cash outflow at completion of £0.61 million (net of estimated cash received on acquisition). 

Commenting on the acquisition, Michael Wright, Group Managing Director of Mattioli Woods, said:

"Our investment in White Mortgages is an exciting extension to our existing client proposition and is another step forward for Mattioli Woods as we continue to expand our operations.  Over the past six-months we have seen significant changes in the economy, none more so than immediately after the Government's mini-budget last September and the impact it had on the mortgage market, with a leap in mortgage interest rates, the withdrawal of many mortgage products and a rapid tightening in lenders' underwriting criteria. By bringing Steve and his team into the Group, we are better positioned to help those clients looking to finance a new property purchase or re-finance existing lending."

Steven White, Director of White Mortgage, added:

"We are very excited to partner with a like-minded management team with high growth ambitions. The sale will help accelerate our growth plan by broadening our proposition with the support of Mattioli Woods. We will continue to place integrity; reliability and a commitment to excellence at the heart of our business."

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This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018. 

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