Acquisitive Kingswood takes over IBOSS at 12.3x EBITDA

Investment management firm Kingswood Holdings has continued its acquisition spree with a £16 million deal for Harrogate-based IBOSS Group. The deal represents a multiple of approximately 12.3x IBOSS’ £1.3 million EBITDA, generated on group revenue of £3.3 million, in the year ending October 31 2020.

IBOSS Group comprises IBOSS Asset Management, Novus Financial Services and the holding company for those two firms, Metnor Holdings. The group provides investment services, include managed portfolios, on an advisory and discretionary basis to IFAs (independent financial advisers) in the UK. The group has over £1.4 billion in assets under management (AUM) and more than 6,000 clients.

The acquisition is Kingswood’s fourth of the year and follows the double takeover of Smythe and Walter Ltd and IFA Money Matters last week. The company says it also has a strong pipeline of future opportunities, with its acquisitive activity being backed by £44.8 million in growth equity from Pollen Street Capital.

The takeover of IBOSS, which is yet to receive regulatory approval, will consist of a £9.6 million initial cash consideration to be paid on the closing of the deal, followed by a maximum of £6.4 million in payments over the coming two years, some of which are contingent upon pre-agreed performance targets being met.

IBOSS will take Kingswood’s UK AUM to approximately £3 billion and the company is aiming to more than double this over the coming three years. The deal also brings its funds under advice to £6.3 billion and active clients to more than 15,900.

Kingswood’s UK CEO David Lawrence called the acquisition “a big step” towards the company achieving its goal of becoming “a leading financial advisory and investment management business”. He added: “With Kingswood’s resources we aim to accelerate growth and create greater reach into the IFA sector.”

“The transaction also allows Kingswood to leverage its successful track record in buying and integrating financial planning businesses by providing the capital to purchase financial planning businesses using IBOSS that wish to exit but don’t wish to risk the investment solution provided to their clients.”

Regarding Kingswood’s future acquisition plans, Lawrence said: “We remain committed to our growth strategy within the UK and internationally. This is our fourth acquisition of 2021, and we have a strong pipeline of high-quality UK opportunities under negotiation, four of which are in the exclusive due diligence stage.”

Metnor Investment and Managing Director Chris Metcalfe said: "We had several potential suitors, but none realised the intrinsic value of how we manage money and the attraction for advisers that comes with our industry-leading service standards and client communications.”

“As part of the Kingswood Group, we will offer our new and existing IBOSS users an exit strategy that will be one of the most attractive in the industry, something that adviser firms have been asking us to facilitate for some years now.”


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