AFH announces acquisition of two IFA firms

The AFH Financial Group has completed the acquisitions of two IFA businesses – Mulberry Independent Financial Advisers and AE Garment Independent Financial Services.

The two deals, worth a combined maximum consideration of £7.2m, will bring in an additional £215m of funds under management (FUM), raising AFH’s total FUM to above £5.6bn.

AFH, a financial planning-led wealth management firm based in the Midlands, already has over 20,000 clients in the UK, and employs 450 professional advisers and 400 support staff.

The firm is paying a maximum purchase price of £5.3m for Mulberry, dependent on its business performance during the earn-out period. The initial consideration for the acquisition of £2.3m was paid from existing cash reserves, with the balance payable in cash over a 26-month period.

Twickenham-based Mulberry has £170m of FUM, and the buy-out will see four advisers – including the founders and current directors – together with their support staff, join AFH.

AFH has also confirmed the acquisition of AE Garment, located in Hemel Hempstead, for a maximum purchase price of £1.9m. Of this amount, an initial £1m was paid in cash on completion, and a further deferred consideration will be payable in cash over the next 26 months, subject to agreed performance criteria being achieved.

AE Garment will bring in an additional £45m of FUM, and the move will see the firm’s principal Tony Garment retire from the business, with his clients allocated to existing AFH advisers.

AFH chief executive Alan Hudson commented: “The announcement of these latest acquisitions follows our recently completed £15m placing in July 2019. Notably, the acquisitions have been completed on attractive, value-enhancing multiples, in line with our business model and those negotiated in previous transactions.

“We continue to undertake due diligence on the pipeline of acquisition opportunities that were referenced in the placing announcement and look forward to updating the market in due course.

He added: “The company continues to enjoy strong organic inflows of funds from existing and new clients with low redemptions. During the current year double-digit gross inflows continue to be achieved whilst outflows, including pension drawdowns, remain below 2%.”

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