Four directors of Aberdeen-based financial adviser Kudos will bank up to £8.7 million in selling their 20-year-old business to AIM-listed pensions specialist Mattioli Woods.
Kudos advises companies and high net worth individuals, employing 45 in Aberdeen, Glasgow and London, and made a pre-tax profit of £535,000 on turnover of £4.3m last year. It has assets under administration and advice of £530m.
Its shareholders are due diligence specialist Jim Tennent, a former area manager for Legal General who led a management buyout of Kudos 11 years ago, employee benefits director Alan Fergusson, head of wealth management Adeline Christy, and non-executive Mike Pappas, an Aberdeen-born investment banker who spends six months a year running a venture capital business in the US.
The deal sees a cash payment of £2.94m plus shares in Mattioli Woods worth £1.19m last Friday, with up to a further £4.75m in cash over three years dependent on financial targets. The Kudos management team will stay on, and will not be able to sell their shares for three years.
Mattioli Woods is a pensions advice and Sipp specialist based in Leicester, which yesterday announced a 10% rise in pre-tax profit to £4.95m on revenues up 12% to £15.4m, and assets under administration up 22% to £2.3 billion. The group’s shares, which peaked at 340p in January this year, rose 2.5p to 259p, valuing the business at £46m.
Ian Mattioli, chief executive, said: “In addition to our geographic footprint, the acquisition gives us the ability to offer our core Sipp, property and investment products to Kudos’ clients and to offer enhanced employee benefits services to Mattioli Woods’ clients and the wider market.”
He said a strong employee benefits proposition was attractive at a time when the introduction of the National Employment Savings Trust and auto-enrolment presented clear opportunities. He added: “In addition, Kudos offers the enlarged group the opportunity to extend the provision of Sipps to a wider audience and adds a specialist wealth management business to Mattioli Woods’ existing operations.”
Mr Tennent said: “Joining the Mattioli Woods group offers valuable opportunities for clients and employees in both organisations.”