Wed, 15 Nov 2023 | BUSINESS SALE
Fintel, a fintech and support services firm serving the UK retail sector, has continued its M&A-driven growth with two strategic acquisitions. The Huddersfield-headquartered firm has acquired VouchedFor and AKG, marking its third and fourth acquisitions this year, respectively.
VouchedFor is a review site for financial advisers, mortgage advisers, accountants and solicitors. The company, which serves more than 5,000 intermediary customers, was acquired by Fintel for an upfront cash consideration of £7.5 million.
This was part debt funded, while £6.5 million of the upfront consideration was drawn from Fintel’s revolving credit facility of £80 million. The deal was agreed under a contingent earnout agreement, with VouchedFor set to receive a payout capped at £10 million based on meeting certain performance targets relating to recurring revenue over the two years post-acquisition.
Fintel feels that the acquisition of VouchedFor will broaden its services in the advice sector. The target company has also recently launched a new “elevation” product, designed to help businesses monitor compliance with Consumer Duty.
AKG provides independent assessments and financial strength ratings for a wide array of organisations, including investment platforms, life companies and discretionary fund managers. Fintel will pay an initial upfront cash consideration of £1.6 million for the firm, while there is also a contingent earnout consideration worth up to £400,000 based on AKG meeting certain criteria in the first three years of ownership.
Fintel subsidiary Defaqto will draw on its parent company’s resources in order to invest in AKG and support the firm’s distribution.
The two deals follow Fintel’s acquisitions of tax specialist Micap and learning and development provider Competent Adviser earlier this year. The company says that the acquisitions support its aim of improving the retail financial services market, building consumer trust and promoting the value of advice.
Fintel’s joint CEO Matt Timmins commented: “VouchedFor and AKG are two market-leading businesses which are highly complementary to our offering and share our vision. VouchedFor is the UK’s standard bearer for trusted advice while AKG has been at the forefront of financial strength ratings and consultancy for over 20 years. Both have strong adjacencies in terms of our capabilities and customers, and we look forward to further developing their compelling growth prospects.”
Regarding the firm’s acquisitive activity, Timmins added: “We continue to deliver growth organically and make progress consolidating the fragmented software market, providing efficiencies for advisers and creating better outcomes for all participants. With a strong merger and acquisition pipeline, underpinned by our balance sheet and cash position, we are confident in making further strategic progress.”
Find out how earnouts are helping to facilitate deals in a tough M&A environment
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